Payroll Tax Credits for businesses using CPEOs

Many small businesses outsource management tasks such as employee benefits, payroll, and worker’s compensation to Professional Employer Organizations (PEOs). Congress, in 2014, passed the Small Business Efficiency Act (SBEA) allowing voluntary certification by the IRS for PEOs. Now, certified PEOs (CPEOs) are enabled to process R&D tax credits as payroll tax credits for eligible clients. Recall that only qualified small businesses (QSBs) can elect to use their R&D tax credits to offset payroll taxes. A QSB is defined as a corporation, partnership, LLC, or individual with less than $5 million in gross receipts in the current tax year and each of the preceding 4 years and zero gross receipts for year preceding the 5-year period. If you are a QSB … Read More