PEOs Claim the Employee Retention Credit

Some businesses use a professional employer organizations (PEO) to act as co-employers. The IRS said (INFO 2023-0001) that when it comes to the employee retention credit, the PEO and not the company, is the party to claim it. This is because the company’s employment tax filings are under the PEO’s employer identification number. The PEO can file a refund claim if eligible. It’s then likely that the PEO is contractually obligated to distribute the refund to the company. #IdeaoftheDay