Employers often outsource payroll and employment tax obligations by contracting with other companies, including IRS-certified professional employer organizations (PEOs) that are allowed to make certain payments and perform payroll administration and federal employment tax reporting—tasks not necessarily available to other organizations.
A PEO—sometimes referred to as an employee leasing company—generally takes on certain responsibilities associated with payroll administration and compliance as the designated employer for the purposes set forth in the services agreement with its customers.
Read a July 2019 report [PDF 124 KB] prepared by KPMG LLP: What’s News in Tax: Certification of professional employer organizations
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