Michael Lodge – 2017 Tax Tips
The Internal Revenue Service on June 1, 2017, issued notices of certification to 84 organizations that applied for voluntary certification as a Certified Professional Employer Organization (CPEO).
After the IRS receives the required surety bond from an approved CPEO applicant, the IRS will publish that CPEO’s name, address, and effective date of certification on IRS.gov.
Under legislation enacted in late 2014, the IRS established a voluntary certification program for professional employer organizations (PEOs). These organizations typically handle various payroll administration and tax reporting responsibilities for their business clients.
Certification affects the employment tax liabilities of both the CPEO and its clients. A CPEO is generally treated as the employer of any individual performing services for a client of the CPEO and covered by a CPEO contract between the CPEO with the client, but only for wages and other compensation paid to the individual by the CPEO.
To become and remain certified under the new program, CPEOs must meet tax compliance, background, experience, business location, financial reporting, bonding, and other requirements.
The IRS continues to process CPEO applications and those applicants not yet receiving a notice of certification will receive a decision from the IRS in coming weeks and months.
Further details on the voluntary certification program for professional employer organizations may be found on irs.gov.