Big news this month! The IRS has announced approval of 84 PEO’s for Certified Professional Employer Organization (CPEO) status. The application process began last summer, but this month the IRS has approved the first round of CPEO’s. The IRS has not yet released the names of the PEO’s which were granted CPEO status, but several PEO’s have issued press releases (see below) communicating they have received this IRS designation. Link to IRS notification
Two Reasons Why This Information is Important to Employers & Brokers:
This now allows an employer to leave a CPEO mid-year without the employer double paying any payroll taxes. The double payment of payroll taxes is the number one reason employers who want to leave a PEO don’t leave.
This now allows an employer to leave a CPEO mid-year and the employees only receive one W2, not two W2’s.
Now that this new legislation has taken effect, it should be easier for brokers to help employers move away from CPEO’s mid-year.
Here are the names of PEO’s who have issued press releases announcing their CPEO designation from the IRS: