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IRS.gov Website
Publication 17
taxmap/pub17/p17-031.htm#en_us_publink1000171391

Allocated Tips(p56)

rule
If your employer allocated tips to you, they are shown separately on your Form W-2, box 8. They are not included in box 1 with your wages and reported tips. If box 8 is blank, this discussion does not apply to you.
taxmap/pub17/p17-031.htm#en_us_publink1000171392

What are allocated tips.(p56)

rule
These are tips that your employer assigned to you in addition to the tips you reported to your employer for the year. Your employer will have done this only if: No income, social security, Medicare, Additional Medicare, or railroad retirement taxes are withheld on allocated tips.
taxmap/pub17/p17-031.htm#en_us_publink1000171393

How were your allocated tips figured.(p56)

rule
The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an approved lower rate) of food and drink sales (other than carryout sales and sales with a service charge of 10% or more). Your share of that amount was figured using either a method provided by an employer-employee agreement or a method provided by IRS regulations based on employees' sales or hours worked. For information about the exact allocation method used, ask your employer.
taxmap/pub17/p17-031.htm#en_us_publink1000265580

Must you report your allocated tips on your tax return.(p56)

rule
You must report all tips you received in 2014 on your tax return, including both cash tips and noncash tips. Any tips you reported to your employer for 2014 are included in the wages shown on your Form W-2, box 1. Add to the amount in box 1 only the tips you did not report to your employer. This should include any allocated tips shown on your Form(s) W-2, box 8, unless you have adequate records to show that you received less tips in the year than the allocated figures.
See What tips to report under Reporting Tips on Your Tax Return, and Keeping a Daily Tip Record, earlier.
taxmap/pub17/p17-031.htm#en_us_publink1000265582

How to report allocated tips.(p56)

rule
Report the amounts shown on your Form(s) W-2 , box 1 (wages and tips) and box 8 (allocated tips), as wages on Form 1040, line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. You cannot file Form 1040A or Form 1040EZ when you have allocated tips.
Because social security, Medicare, and Additional Medicare taxes were not withheld from the allocated tips, you must report those taxes as additional tax on your return. Complete Form 4137, and include the allocated tips on line 1 of the form. See Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, earlier.