As a result of recent natural disasters, many payroll and practitioner businesses and their clients may qualify for tax relief. Refer to the Disaster Relief Resource Center for Tax Professionals for information on disaster resources.
What is the CPEO Program?
The Tax Increase Prevention Act of 2014, enacted Dec. 19, 2014, requires the IRS to establish a voluntary certification program for professional employer organizations (PEOs). PEOs handle various payroll administration and tax reporting responsibilities for their business clients and are typically paid a fee based on payroll costs.
Am I Eligible?
To be eligible for certification as a CPEO, a PEO:
- Must be a business entity.
- Must have at least one physical business location within the United States.
- Should have a history of federal, state, and local tax compliance, financial responsibility, and organizational integrity.
- Should be managed by individuals (a majority of whom are US citizens or residents) who have knowledge or experience regarding federal and state employment tax compliance and business practices relating to those compliance requirements.
How Do I Apply?
The IRS uses an Online Registration System for PEO certification. Click the “How Do I Apply” link below for instructions for the fingerprint process and the application system.
The sequence for completing an application for certification is as follows:
- Individual Identity Verification
- Responsible Individual Personal Attestation (RIPA)
- CPEO Application
Annual verification is open to CPEOs with an effective date of certification of January 1, 2017. Visit the Requirements for Maintaining Certification as a CPEO page for additional information on how to submit an annual verification. CPEOs that submit a properly completed and executed annual verification and pay the $1,000 user fee will remain in active status while their annual verifications are under review. The IRS will notify a CPEO upon approval of its annual verification.