About The CPEO Program
This voluntary certification program provides added assurance to small business owners who want to turn to a PEO to handle their employment tax issues and back office administrative and HR tasks.
IRS PEO certification is important because it
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Confirms
the certified PEO (CPEO) can pay federal employment taxes under its EIN.
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Protects
customers through the CPEO’s sole liability on wages paid to WSEs by CPEO.
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Provides certainty
with respect to when a wage base restart is not necessary for new customers.
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Confirms
the CPEO’s FUTA credit for all SUTA paid by CPEO or customer.
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Offers clear guidance
for the CPEO and the customer on pass-through of tax credits and employment tax exclusions.
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Gives
increased comfort for potential client with use of IRS-certified PEO.
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Lends credibility
to PEO business model, especially with investor community and federal regulators.
IRS Regulations and Guidance on Certification with Related NAPEO Resources
Treasury Regulations: Final rules (published May 28, 2019)
Federal Register. Vol. 84, No. 102. Tuesday, May 28, 2019. Rules and Regulations
Treasury Regulations: Proposed rules (published May 6, 2016)
Federal Register. Vol. 81, No. 88. Friday, May 6, 2016. Proposed Rules
Treasury Regulations: Final and temporary rules (published May 6, 2016)
Federal Register. Vol. 81, No. 88. Friday, May 6, 2016. Rules and Regulations
IRS Revenue Procedures: Rev. Proc. 2016-33 – procedures for applying to be certified
26 CFR 301.7705: Applying for certification as a certified professional employer organization…
Summary of Rev. Proc. 2016-33
On June 3, 2016, the IRS released Revenue Procedure 2016-33, which provides detailed procedures for applying to be certified as a CPEO. The revenue procedure builds on guidance provided in Final and Temporary regulations that were released last month, providing some additional details on the procedures for requesting certification and raising some potential new questions. Application forms, instructions, surety bond forms, and other materials are not yet available. In addition, the IRS specifically solicits comments, including suggestions related to the revenue procedure and the administration of the CPEO certification program…
Summary of Notice 2016-49
On Friday, August 5, 2016 the IRS released Notice 2016-49 addressing certain time sensitive issues with respect to the PEO certification program….
IRS CPEO FAQs (periodically updated)
Certified Professional Employer Organization Program help page
IRS.gov Information on PEO Certification
CPEO Home Page
Professional employer organizations (PEOs) handle various payroll administration and tax reporting responsibilities for their business clients and are typically paid a fee based on payroll costs. Pursuant to section 7705(a) of the Internal Revenue Code, the term “certified professional employer organization” (CPEO) means a person that applies to be certified as a CPEO and that the Internal Revenue Service (IRS) has certified as meeting the applicable requirements…
IRS Public Listings of CPEOs
CPEO public listings…
CPEOs – What You Need to Know
As a Certified Professional Employer Organization (CPEO), you need to know about the following sections…
How Do I Apply?
CPEO applicants must complete an application through the IRS Online Registration System…
Individual Identity Verification for Responsible Individuals
The CPEO Application is for Certified Professional Employer Organizations and other Professional Employer Organizations (PEO) applying for certification, only. If you received Letter 4883C or Letter 5071C, please see the Identity Verification Service information. If you are not associated with a CPEO applicant or CPEO please do not use the steps below. Instead refer to the identity verification process for the program you are seeking…
Responsible Individuals
Responsible Individuals play an important and necessary role in the Certified Professional Employer Organization (CPEO) Application process…
Create a Controlled Group License
The following instructions only apply to Certified Professional Employer Organizations (CPEO) and CPEO applicants that are members of a controlled group (within the meaning of sections 414(b) and (c) of the Internal Revenue Code (IRC)) with other CPEOs or CPEO applicants…
CPEO Application
PEOs may apply for certification via the IRS Online Registration System. The CPEO application requires information from each responsible individual and requires the application submitter to upload documents to the online application account. PEOs must meet certain requirements when submitting an application for certification. ..
Online Registration System for CPEOs
This online registration system currently supports two distinct programs: the voluntary certification of professional employer organizations and the Form 8976, Notice of Intent to Operate Under Section 501(c)(4). This system allows you to complete the registration/certification process, keeps your account information current, and enables you to receive secure, digital communications from the IRS.
Requirements for Maintaining Certification as a CPEO
A CPEO can report material changes to the IRS by updating its account information…
CPEO Customers – What You Need to Know
CPEO applicants must complete an application through the IRS Online Registration System. Both the CPEO applicant and its responsible individuals must complete portions of the application…
How to Apply for IRS Certification
IRS webpage
Voluntary certification program for professional employer organizations (CPEOs)
Steps to Prepare for IRS Certification
Steps to Prepare for IRS Certification
Roadmap to IRS Certification
Roadmap to IRS Certification
NAPEO Letters to the IRS on Certification Program Development and Implementation
February 5, 2021 NAPEO comments responding to the IRS’ request for comments on the CPEO forms and regulations
Our comments below focus on modifications to the CPEO regulations and forms that we believe would be helpful in increasing the functionality and efficiency of the CPEO program, including by improving the clarity and usability of the forms…
February 2, 2021 NAPEO comments in support of the IRS Advisory Council’s recommended changes to Form W-2
On behalf of the National Association of Professional Employer Organizations (NAPEO) and its members, we are writing to urge the Internal Revenue Service (IRS) to implement the changes to Form W-2 that were recommended by the IRS Advisory Council (IRSAC) in its November 2020 public report…
December 15, 2020 NAPEO letter to the IRS on e-signatures
On behalf of the National Association of Professional Employer Organizations (NAPEO)1 and its members, we are writing to renew our request that the Internal Revenue Service (IRS) accept electronic signatures (e-signatures) on Form 8973, Certified Professional Employer Organization/ Customer Reporting Agreement…
March 31, 2020 NAPEO letter requesting guidance under CARES Act and FFCRA
On behalf of the National Association of Professional Employer Organizations (NAPEO), I respectfully request that the Treasury Department and Internal Revenue Service issue guidance on the Families First Coronavirus Response Act (the FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES) with respect to professional employer organizations (PEOs)1 and their client employers…
March 21, 2019 NAPEO letter to the IRS on CPEO Proposed-Temporary Regulations
As the Department of the Treasury (Treasury) and Internal Revenue Service (IRS) continue working to finalize the temporary and proposed regulations for certified professional employer organizations (CPEOs), the National Association of Professional Employer Organizations (NAPEO) thought it would be helpful to consolidate, update, and highlight certain comments that NAPEO has previously submitted to the Treasury and IRS regarding the CPEO program and its implementation…
December 5, 2018 NAPEO letter to the IRS responding to proposed changes to Form 8973
On behalf of the National Association of Professional Employer Organizations (NAPEO), we would like to provide the following comments on (1) draft Form 8973 (Rev. December 2018), the Certified Professional Employer Organization/Customer Reporting Agreement, and (2) the draft Instructions for Form 8973 (Rev. December 2018). NAPEO’s comments reflect issues and questions that have been identified by NAPEO’s professional employer organization (PEO) members…
October 16, 2017 letter regarding NAPEO’s response to a request under the Paperwork Reduction Act to submit comments about the CPEO application process
On behalf of the National Association of Professional Employer Organizations (NAPEO), thank you for the opportunity to submit comments pursuant to the Paperwork Reduction Act (PRA) on the Internal Revenue Service’s (IRS) collection of information in connection with the following CPEO forms: (1) Form 14737, Request for Voluntary IRS Certification of a Professional Employer Organization (Application); (2) Form 14737–A, CPEO Responsible Individual Personal Attestation (RIPA); (3) Form 14751, Certified Professional Employer Organization Surety Bond; and (4) Form 8973, Certified Professional Employer Organization/Customer Reporting Agreement…
August 24, 2017 letter regarding NAPEO’s comments on Draft Schedule R (Form 940)
On behalf of the National Association of Professional Employer Organizations (NAPEO), the following comment is provided with respect to the Internal Revenue Service’s (IRS) draft Schedule R (Form 940) – Allocation Schedule for Aggregate Form 940 Filers dated as of July 5, 2017…
July 7, 2017 letter regarding NAPEO’s comments on Form 8974
On behalf of the National Association of Professional Employer Organizations (NAPEO), I would like to convey NAPEO’s appreciation for the opportunity to submit comments pursuant to the Paperwork Reduction Act (PRA) on the Internal Revenue Service’s (IRS) collection of information in connection with Form 941 (Employer’s Quarterly Federal Tax Return) and related schedules and forms…
May 1, 2017 letter regarding 2017 transition issues in connection with the certification program for professional employer organizations (PEOs)
On behalf of the National Association of Professional Employer Organizations (NAPEO), this letter identifies time-sensitive concerns that NAPEO and its CPEO Applicant members have raised regarding certain 2017 transition issues in connection with the certification program for professional employer organizations (PEOs)…
December 22, 2016 NAPEO comments responding to the IRS’ request for comments on the CPEO Application (Form 14737) and the Responsible Individual Personal Attestation (RIPA) (Form 14737-A)
On behalf of the National Association of Professional Employer Organizations (NAPEO), I would like to convey NAPEO’s appreciation for the opportunity to submit comments pursuant to the Paperwork Reduction Act (PRA) on the Internal Revenue Service’s (IRS) collection of information in connection with Form 14737, Request for Voluntary IRS Certification (CPEO Application), and Form 14737-A, CPEO Responsible Individual Personal Attestation (RIPA)…
September 19, 2016 letter on Draft Form 8973
The following comments on the Internal Revenue Service’s (IRS) draft Form 8973 (Certified Professional Employer Organization / Customer Reporting Agreement), the draft Instructions for Form 8973, and the draft Schedule R (Allocation Schedule for Aggregate Form 941 Filers) are provided on behalf of the National Association of Professional Employer Organizations (NAPEO)…
August 4, 2016 NAPEO Comments on Draft Surety Bond Form
On behalf of the National Association of Professional Employer Organizations (NAPEO), I would like to provide the following comments on the Internal Revenue Service’s (IRS) draft Form 14751 (Certified Professional Employer Organization Surety Bond) (the draft Surety Bond Form)…
August 4, 2016 NAPEO Comments on Temporary and Proposed Regulations
This letter provides further comments of the National Association of Professional Employer Organizations (NAPEO) on the proposed regulations issued by the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) regarding the professional employer organization (PEO) certification program…
July 5, 2016 NAPEO comments on the Collection of Information with respect to Treasury/IRS Regulations Establishing a PEO Certification Program to the Office of Management and Budget
On behalf of the National Association of Professional Employer Organizations (NAPEO), I would like to convey NAPEO’s appreciation for the opportunity to submit comments pursuant to the Paperwork Reduction Act (PRA) on the collection of information contained in the proposed rulemaking published by the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) to establish a certification program for professional employer organizations (PEOs)…
June 15, 2016 – Requesting Technical Corrections
On behalf of the National Association of Professional Employer Organizations (NAPEO), I would like to convey the appreciation of NAPEO’s members for the substantial effort and resources that the Treasury Department and the Internal Revenue Service (IRS) have devoted to the establishment of a PEO certification program…
March 11, 2016
Thank you again for meeting with representatives of NAPEO on January 19, 2016 to discuss the Internal Revenue Service’s (the Service) request for information (RFI) on professional employer organization (PEO) industry practices, as announced in IR-2015-127, and the Service’s related questions…
March 4, 2016
Thank you for meeting with representatives of NAPEO on January 19, 2016 to discuss the Internal Revenue Service’s (the Service) request for information (RFI) on professional employer organization (PEO) industry practices, as announced in IR-2015-127, and the Service’s related questions, especially as they pertained to accounting-related matters…
January 8, 2016
On behalf of NAPEO and its professional employer organization (PEO) members, I am writing in response to the Internal Revenue Service’s (the Service) request for information (RFI) on PEO industry practices, as announced in IR-2015-127 on November 17, 2015…
November 5, 2015
Thank you for meeting with representatives of NAPEO on September 25, 2015 to discuss the delay in the implementation of the professional employer organization (PEO) certification program established under new Internal Revenue Code…
March 18, 2015
This letter is the first in a series of submissions from NAPEO with respect to the efforts of Treasury and the Service regarding those certification provisions, which were originally introduced in the Small Business Efficiency Act (SBEA)…
April 28, 2015
That initial submission focused on issues that are integral to the establishment of the PEO certification program (what we referred to as the Phase 1 issues). This second submission provides suggestions (again in suggested Q&A format) on certain issues and questions that we believe should be addressed in early interim guidance…
August 25, 2015
On behalf of NAPEO and its PEO members, I am writing to express the association’s concerns over the Internal Revenue Service’s (the Service) announcement that the establishment of a voluntary certification program for professional employer organizations (PEOs) has been delayed…
Frequently Asked Questions on IRS Certification
May 2015 FAQs
Frequently Asked Questions about the Small Business Efficiency Act..
February 2015 FAQs
NAPEO Small Business Efficiency Act (SBEA) Implementation Update
Latest IRS FAQs on Application Process
Certified Professional Employer Organization Program help page
NAPEO SBEA Updates
NAPEO SBEA Update — June 1, 2017
Today, the IRS approved the first tranche of CPEO applications. The first approvals appear to be for those PEOs that applied prior to October 1, 2016, and the certification is retroactive to January 1, 2017. The IRS will publish the list of certified PEOs on their website, and NAPEO anticipates that list to be published on or around July 15…
NAPEO SBEA Update — May 22, 2017
On May 19, the IRS released final form 8973. The purpose of this form is for Certified Professional Employer Organizations (CPEOs) to notify the IRS that a service contract between a CPEO and a customer has started or ended. On Thursday May 18, the IRS posted the instructions for Form 8973, which represent an improvement over the draft Form 8973 previously released…
NAPEO SBEA Update — April 21, 2017
Bloomberg BNA reported that the IRS will begin certifying PEOs in June. At the annual American Payroll Association Capital Summit, a spokesperson for the IRS stated that, “recent applicants to the Certified Professional Employer Organization are to be notified regarding authorization in early June…. Those applicants would be eligible for retroactive responsibilities to the first quarter of 2017.” Changes made to the IRS PEO certification website also seem to indicate that the IRS will be approving PEO certification applications in June. It is important to stress that the IRS has not told NAPEO that they will be certifying PEOs in June…
NAPEO SBEA Update — August 19, 2016
IRS Updates FAQs, Releases Draft Form 8973 and Instructions on CPEO/Customer Reporting
NAPEO SBEA Update — August 8, 2016
UPDATE: IRS Releases Several Changes to its PEO Certification Program
NAPEO SBEA Update — August 4, 2016
Status of Unresolved Issues…
NAPEO SBEA Update — July 15, 2016
IRS Releases Additional Information on PEO Certification
NAPEO SBEA Update — July 8, 2016
IRS Releases PEO Certification Application Form
NAPEO SBEA Update — July 1, 2016
IRS Voluntary Certification Program for Professional Employer Organizations (CPEOs) Website Now Live
NAPEO SBEA Update — June 24, 2016
IRS Certification Roadmap Now Live on NAPEO Website
NAPEO SBEA Update — June 6, 2016
Following up on our email from Friday, here is a summary of IRS Revenue Procedure 2016-33 written by NAPEO SBEA counsels Randy Hardock and Courtney Zinter of Davis & Harman, outlining the application procedures for a CPEO…
NAPEO SBEA Update — June 3, 2016
This afternoon, the Internal Revenue Service (IRS) released Revenue Procedure 2016-33 which sets forth the detailed procedures for applying to be certified as a CPEO. NAPEO has been expecting this guidance…
NAPEO SBEA Update — May 6, 2016
SBEA Regulations Published in the Federal Register, NAPEO’s Initial Summary Now Available
NAPEO SBEA Update — May 5, 2016
IRS Releases Final Temporary Regulations and Proposed Rules for PEO Certification
NAPEO SBEA Update — March 11, 2016
NAPEO Responds to IRS Questions on Accounting, Surety Bonds
NAPEO SBEA Update — February 19, 2016
If you haven’t already, familiarize yourself with the SBEA statutory language company; have your marketing material ready for PEO certification; prepare your social media strategy; plan for communicating to your existing clients about PEO certification; and discuss with your attorney what certification will mean for your CSA’s. Finally, if you have a tax dispute with the IRS, work now to settle it…
NAPEO SBEA Update — January 14, 2016
NAPEO Responds to IRS Request for Information on the SBEA
NAPEO SBEA Update — December 23, 2015
The latest information on the implementation of the Small Business Efficiency Act
NAPEO SBEA Update – August 28, 2015
NAPEO Responds to IRS Delay of PEO Certification
NAPEO SBEA Update – August 5, 2015
IRS Officially Delays Implementation of SBEA Certification Program
NAPEO SBEA Update – July 21, 2015
IRS Delay in Implementing the SBEA May Be Longer Than Expected
NAPEO SBEA Update – July 7, 2015
IRS Misses July 1 Deadline for Issuing PEO Certification Program…
NAPEO SBEA Update – June 25, 2015
Release of the PEO Certification Program by IRS Likely to be Delayed…
NAPEO SBEA Update – May 7, 2015
Representatives of the NAPEO Working Group and the general counsel of the Surety & Fidelity Association of America (SFAA) met with Treasury and IRS officials on April 29, 2015, to discuss SBEA implementation issues raised in NAPEO’s first submission to the IRS, with respect to the establishment of the PEO certification program…
NAPEO SBEA Update – February 4, 2015
The SBEA Working Group’s primary goal is to function as an advocate for and representative of the entire PEO industry. The board was very careful to balance the membership of this working group so it represents a cross-section of the NAPEO membership…
NAPEO SBEA Update – January 30, 2015
Just a quick note to update you on the Small Business Efficiency Act, which passed at the end of last year. (Summary here, bill text here.) I was in Florida visiting members last week, and discovered that a lot of folks are wondering what’s going on…
NAPEO SBEA Update – January 12, 2015
As you are aware, President Obama signed the tax extenders bill (Public Law 113-295) on Friday, December 19, 2014. Included in the legislation was the Small Business Efficiency Act (SBEA), our top federal legislative priority for the last decade. We have updated our website with a summary of the SBEA…
Announcement of the passage of the SBEA by Congress – December 2014
I am very happy to report the Senate passed the Small Business Efficiency Act (SBEA), NAPEO’s top federal legislative priority for the last decade or more. It was previously approved by the House of Representatives as an amendment to the ABLE Act in order to offset the costs associated with that proposal, then incorporated into the tax extenders legislation…
Background Material on the SBEA
The SBEA legislative language
Sections and amendments…
One-page summary of the SBEA
What Does the Small Business Efficiency Act (SBEA) Mean for the PEO Industry?
Flowchart on how the SBEA works
How the SBEA works
Detailed explanation of the SBEA and what it means for the PEO industry
NAPEO Small Business Efficiency Act (SBEA) Overview
NAPEO press release announcing the passage of the SBEA
President signs legislation defining professional employer organizations in the federal tax code…
The Congressional Joint Committee on Taxation summary of the SBEA
The following is the description of the Small Business Efficiency Act (SBEA) from the Joint Committee on Taxation analysis of the Tax Reform discussion draft announced on Wednesday, February 26, 2014.
NAPEO IRS CPEO Working Group
NAPEO has formed a working group consisting of Certified PEOs to share information and best practices. If you wish to be a part of this group, email Thom Stohler, Vice President of Federal Government Affairs and ask to be added to this working group.
IRS Forms
Form 8973 (CPEO/Customer Reporting Agreement) (revised December 2018)
Certified Professional Employer Organization/Customer Reporting Agreement
Instructions for Form 8973 (revised December 2018)
Certified Professional Employer Organizations (CPEOs) use Form 8973 to notify the IRS that a service contract between a CPEO and a customer has started or ended, and to correct a previously filed Form 8973.
IRS FAQs on Form 8973 (periodically updated)
Form 8973 FAQs
IRS Fact Sheet on temporary policy allowing electronic signatures on certain forms, including Form 8973 (updated December 2021)
Details on using e-signatures for certain forms
Schedule R (Form 941), including instructions (revised June 2021)
Schedule R (Form 941)
Schedule R (Form 940), including instructions (revised December 2017)
Schedule R (Form 940)
Form 8974 (Qualified Small Business Payroll Tax Credit for Increasing Research Activities) (revised December 2017)
Form 8974: (Rev. December 2024) Qualified Small Business Payroll Tax Credit for Increasing Research Activities
Instructions for Form 8974 (revised December 2018)
Instructions for Form 8974 (Rev. December 2024) Qualified Small Business Payroll Tax Credit for Increasing Research Activities
Responsible Individual Personal Attestation (RIPA) (use the IRS online registration system)
This online registration system currently supports two distinct programs: the voluntary certification of professional employer organizations and the Form 8976, Notice of Intent to Operate Under Section 501(c)(4). This system allows you to complete the registration/certification process, keeps your account information current, and enables you to receive secure, digital communications from the IRS.
Application for Certification (use the IRS online registration system)
This online registration system currently supports two distinct programs: the voluntary certification of professional employer organizations and the Form 8976, Notice of Intent to Operate Under Section 501(c)(4). This system allows you to complete the registration/certification process, keeps your account information current, and enables you to receive secure, digital communications from the IRS.
Questions
For general questions about PEO Certification please contact:
NAPEO COO, Farrah Fielder
NAPEO Vice President of Federal Government Affairs, Thom Stohler
For Specific questions about certification and how its requirements affect your PEO please contact:
Outside counsel, accountant or other trusted business advisor