Key PEO Issues in Tax Reform
The three critical issues NAPEO wants to see included in any tax reform legislation are:
- Clarification on liability for payroll tax credits between PEOs and their clients.
- Clarification of PEO client eligibility for credits in Section 199-A of the tax code.
- Modernization of IRS processes to improve processing time and create more secure and trackable transmissions.
Key Small Business Tax Provisions
The PEO industry supports tax provisions that benefit our small business clients.
- Renewal of the Section 199-A deduction
- Extension of the R&D tax credit
- Extension of the Work Opportunity tax credit
What is NAPEO Doing
Letter to President Trump on need for IRS modernization
Casey Clark, NAPEO CEO, writes to highlight several shared priorities that, with the presidents leadership, would create a policy and business environment that boosts the ability of small businesses to succeed and removes obstacles to economic growth and prosperity for Americans and their communities.
Letter to Chairs of Tax Committees on PEO Tax Reform Priorities
As you evaluate the priorities for tax reform in 2025, we respectfully request your support in prioritizing the following changes to the Internal Revenue Code (IRC).
Comments to House Ways & Means Subcommittee Hearing on the IRS
NAPEO is submitting this statement to call attention to the harm being done to small businesses as a direct result of the antiquated technologies and inefficient processes used by the IRS to process payroll tax credits that PEOs manage on behalf of their small business clients.
Letter to IRS Commissioner on liability for payroll tax credits
NAPEO is submitting this statement to call attention to the harm being done to small businesses as a direct result of the antiquated technologies and inefficient processes used by the IRS to process payroll tax credits that PEOs manage on behalf of their small business clients.
Overview of Process
The legislative vehicle Republicans in Congress will use to enact the changes to the tax code is reconciliation – a budget process that can pass both the House and Senate with a simple majority. Reconciliation is typically a partisan exercise, used by a party that has a majority in both chambers of Congress and control of the White House.
The “scoring” of reconciliation – how much tax revenue will be reduced by the various tax cuts – is a critical component that could derail this bill. Which tax cuts are extended, and how the 2017 tax law interacts with President Trump’s campaign promises to eliminate taxes on tips and Social Security benefits is another factor in considering reconciliation.