June 20, 2017 – The Internal Revenue Service* (IRS) named Progressive Employer Management Company (PEMCO) as one of the first Professional Employer Organizations (PEOs) in the U.S. to receive a Certified Professional Employer Organization (CPEO) designation. The certification is effective January 1, 2017, and only a select group of PEOs met the requirements for this elite designation.
“The requirements to become and remain certified as a CPEO is quite demanding,” said Clinton Burgess, CEO of PEMCO. “The CPEO designation shows our commitment to abide by a higher standard in the industry and gives our clients the necessary assurance that we offer an exceptional PEO service.”
The CPEO certification is voluntary. In accordance with the Tax Increase Prevention Act of 2014, the IRS established this voluntary certification program for PEOs. To be certified under the new program, CPEOs must have a history of federal, state, and local tax compliance, financial responsibility, as well as organizational integrity, among other things.
Benefits for companies working with a CPEO include:
- Peace of mind. Clients of CPEOs can rest assured that employment-related taxes are being handled appropriately.
- Limited payroll tax liability. The IRS cannot hold CPEO clients liable for unpaid taxes in the event that the PEO did not pay the required taxes. CPEOs take sole liability for federal employment related taxes of its clients.
- Tax credit eligibility. CPEO clients are eligible for federal tax credits. CPEOs are obliged to calculate and report the eligible amounts to their CPEO clients.
- No double taxation when switching or partnering with a CPEO mid-year. Working with a CPEO eliminates the wage base restart provision for businesses that partner with a PEO mid-year.
For CPEOs to remain compliant, the IRS requires annual verification, a continued bond (or bonds) from a qualified surety for the payment of federal employment taxes, annual audited financial statements, and quarterly assertions, attestations, and working capital statements. There are also reporting requirements as it relates to commencement and termination contracts between the CPEO and its clients, employment tax reporting, and any material changes that might affect the continuing accuracy of any agreement or information previously provided to the IRS.
PEMCO, headquartered in Sarasota, is locally and nationally recognized as one of the fastest growing companies in its industry, and has been servicing the professional, medical, contractor, hospitality, service, industrial and nonprofit sectors for more than 20 years.
For more information about PEMCO, visit http://www.progressiveemployer.com/.
* The IRS does not endorse any particular certified professional employer organization. For more information on certified professional employer organizations go to www.IRS.gov.