CPEO Certification with Internal Revenue Service

It’s official! The first group of Professional Employer Organizations (PEOs) has been certified under the IRS program on June 1, 2017. PEOs that applied went through a rigorous vetting process and complied with numerous requirements set forth by the IRS in order to become a CPEO. The newly certified PEOs have proven to be the trailblazers of the industry, setting high standard of excellence and are now recognized as trustworthy and dependable by the IRS.

“As Tandem HR is about to celebrate its 20th anniversary in the PEO industry, we are very humbled and honored to be one of the first few PEOs to be certified by the IRS” says Bruce Leon, President and CEO. “We congratulate the rest of the first class of graduates for this great achievement.”

What does this mean?

The designation provides employers with added protection and peace of mind when they select one of the certified PEOs as a partner. This will allow strong and proven PEOs, like Tandem HR, to expand their presence, providing better options to local organizations seeking HR outsourcing solutions. Tandem HR clients have even more financial protection than ever before, as the government recognizes the valuable impact we have on the success of our clients’ businesses.

What is a CPEO Certification?

Effective January 1, 2017, PEOs were able to apply for a certification under a new IRS program created by the Small Business Efficiency Act (SBEA). The certification set forth an extensive list of requirements and procedures to comply with in order to obtain and maintain the approval of the IRS.

How can the CPEO designation of your PEO benefit your organization?

Peace of mind

PEOs are not required to participate in the certification program. If your PEO does become certified, you can rest assured they meet specific background and experience prerequisites, satisfy strict financial requirements and independent audit standards, and maintain certain contractual conditions with their clients.

Burden of liability

Once a business remits their employees’ federal tax withholdings to their CPEO, they are no longer held responsible for the submission of that payment to the government. The burden for any delayed or inaccurate payments is now shifted to the CPEO.

No tax duplication for partnering with a CPEO mid-year

The certification eliminates the federal wage base restart for businesses that join a PEO relationship mid-year, eliminating the financial burden of double federal taxation. Additionally, the SBEA confirms that businesses working with CPEOs still qualify for specified federal tax credits that the organization would be entitled to claim if they were not in a PEO relationship.

 

Tandem HR

Tandem HR, one of the Midwest’s largest privately held and newly approved CPEO, enables hundreds of small to mid-sized companies to grow their business by bringing cost and resource savings through high touch and customized solutions associated with human resourcesbenefitspayroll, tax administration, regulatory compliance and risk management.

For more information on the CPEO certification or Tandem HR, please visit TandemHR.com or call 630.928.0510.