jtax
Level 10

Business & farm

@mesquitebean I don't know enough about this area to give the OP a definitive answer. Here are a couple of links discussing the issue, albeit in the context of a an S-Corp, which raises issues not present for a sole proprietorship or LLC (which has not elected S-Corp status).

 

The bottom line seems to be, though I'm not certain,that if if the payment org (a PEO) is reporting the employees on its own EIN, the business doing the work seems to report the expense on whatever line makes the most sense, sometimes "other" and fully discloses what the payment is. 

 

Other articles discuss issues of who the actual employer is and who has liability for unpaid FICA/withholding. 

 

This could be a case where the OP is best off hiring a CPA for an hour to get professional, written, advice, rather than relying on an Internet form of volunteers.

 

links of some interest: 

 

https://proconnect.intuit.com/community/tax-talk/discussion/qbi-and-leased-employees/00/1863

 

https://proconnect.intuit.com/community/tax-talk/discussion/qbi-and-leased-employees/00/1863

 

https://www.atxcommunity.com/topic/20596-s-corp-using-peo/

 

 

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