"In summary, the obvious advantage of becoming a CPEO is the continuation of the taxable wage base for FUTA and FICA. The disadvantage for some PEO’s is they become the employer on a federal level now and are responsible for the reporting of the FICA and FUTA taxes. For the client company leaving the PEO, they may also continue the FUTA and FICA taxable wage base reported by the CPEO. In past years, this was not allowed."
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