Today’s Professional Employer Organization (PEO) industry is growing at a rapid pace and needs to have a team of financial services professionals that responds quickly to change. The average PEO has outgrown the typical accountant and developed a need for a professional services firm with a deep industry focus. With change, managing risk and realizing tax savings opportunities become a more important focus as PEOs decide how they will adapt and evolve their business models for long-term survival. Regulatory issues require professional knowledge that integrates financial and business expertise to keep your business risk at a minimum.
We recognize that PEOs require their financial advisors to add value by understanding their business and ever-changing regulations that surround their industry. As leaders in the PEO industry, we are quick to identify and address new trends, accounting requirements and regulations to ensure our clients’ future success.
Our firm has been actively involved in National Association of Professional Employer Organizations (NAPEO) for several years. As board members of NAPEO’s Accounting Practice Committee and Midwest Leadership Council and Finance Committee, our team of professionals has significant experience serving PEO clients. As experts in our field, we are regularly called upon to speak at conferences, generate articles, and advise on key issues surrounding the PEO industry.
We are also a strong proponent of the PEO industry's accreditation and financial assurance services provided through the Employer Services Assurance Corporation (ESAC). Our professionals work with ESAC in support of the program's PEO accreditation services, including serving as Professional Advisory Directors on ESAC's board and assisting PEOs with making any financial and/or operational improvements needed to achieve the industry's gold standard. Our firm is proud to also support the PEO industry through its participation as a Legacy Partner in the Service Provider Partner Program of the Alliance for PEO Electronic Compliance (APEC). This organization serves as an alliance between the PEO industry and regulatory agencies to promote efficient and effective PEO regulatory compliance in support of the industry's strategic growth initiative.
On Aug. 8 the Internal Revenue Service issued proposed regulations containing some clarification on the Tax Cuts and Jobs Act (TCJA) passed last December. One of the areas of anticipated clarification was whether W-2 wages paid from third party payers, such as professional employer organizations (PEOs) or agents under section 3504, were included in the wages of the third party payer or the taxpayer for purposes of calculating the qualified business deduction for pass-through entities.
Employers in California and the US Virgin Islands are the only jurisdictions subject to credit reduction for the 2016 tax year due to failure to pay off federal UI loans by Nov. 10, 2016. Employers in these jurisdictions face a 2016 federal unemployment tax that is 1.8 percent higher than employers not in credit reduction states.
The IRS released temporary and proposed regulations for a the new voluntary certification program for PEOs. The application process is targeted to open on July 1. Under the IRS program, PEOs that apply will be required to meet certain requirements to gain certification. Click here to read the full article from Accounting Today.
Recently in Washington D.C., Jeff Solis PEO Practice Leader at UHY LLP, and other industry leaders met with representatives from the IRS and the US Treasury to address details included in the Small Business Efficiency Act (SBEA).
The Protecting Americans from Tax Hikes Act of 2015 (PATH) was signed by President Obama on Dec. 18, 2015. Included in the many tax breaks and incentives that were "extended" by this bill was the reinstatement of the Work Opportunity Tax Credit (WOTC). The WOTC is a credit to employers who hire certain targeted groups of employees and is based on a percentage of the wages paid to those employees. The PATH Act even added a new category that will be available in 2016.