Department of Treasury Guidance a Victory for the PEO Industry
Thank you to all of you who weighed in, you made a difference!
Today, the U.S. Department of Treasury (Treasury) and the Internal Revenue Service (IRS) issued a notice of proposed rulemaking that contains guidance for pass-through entities that are clients of PEOs. The guidance clearly states that eligible pass-through entities that are clients of a PEO can take the 20 percent tax deduction created by Section 199A of tax reform.
This guidance affirms what we have advocated this year: being a PEO client does not affect the eligibility of a pass-through entity for the 20 percent tax deduction in Section 199A of the tax code.
Since January of this year, we have led a lobbying campaign to push the IRS to provide this much needed clarity for PEOs and their clients. The formal guidance represents a major victory for the PEO industry, and demonstrates that when the industry works together with one voice, it can achieve victories in Washington. Thank you again.
Relevant language of the rule can be found here.