This article is about Justworks PEO. What product am I using?
What is IRS Form 8973?
Certified Professional Employment Organizations (CPEOs) are required to file IRS Form 8973 to notify the IRS that a service contract between a CPEO and a customer has started or ended. It also identifies the forms that a CPEO will file on its customers’ behalf to report wages or compensation that are processed through the CPEO.
What are the benefits of the CPEO status?
Justworks first obtained CPEO certification from the IRS in 2017. One of the primary benefits of Justworks’ CPEO status is that Justworks has sole statutory liability for federal payroll taxes on wages that are processed on our platform, as opposed to being jointly liable with the customer. To benefit from Justworks’ CPEO status and avoid joint liability for federal payroll taxes, you will need to sign IRS Form 8973.
Why do I need to complete Form 8973?
To benefit from Justworks’ CPEO status and avoid joint liability for federal payroll taxes, you will need to sign Form 8973.
How do I complete Form 8973?
On or after your company’s start date, you will receive a notification banner on your Justworks home dashboard to complete Form 8973 within 10 business days.
After clicking Continue, you will be redirected to your company Document Center where Form 8973 will be visible in the To Do section.
Selecting Review Form will begin a flow to review the legal information used to autopopulate the form including: EIN, Legal Name, Trade Name (dba) and Business Address.
If all information is correct, you will be able to complete and E-sign the form. While under review, Form 8973 will show as Pending Review in the Document Center. This generally takes one business day, and Justworks will reach out if any additional information is needed.
Once the Form 8973 is accepted, a counter-signed Form 8973 will be available in your Document Center.
Why would my form not be accepted by Justworks or the IRS?
While the IRS may reject Form 8973 for various reasons, the most common one is that the legal entity name and/or FEIN do not match what the IRS has on file. In the event that Justworks receives such notice, our team will contact you directly to help resolve the matter.
My company already onboarded with Justworks; why am I being asked to complete this form now?
Justworks has operated an IRS-certified PEO since 2017 and currently maintains multiple PEO entities. When Justworks creates a new PEO entity, there may be some lag time before the new entity becomes fully recognized as a CPEO by the IRS. In that case, we will not request Form 8973 until the entity has been certified.
Justworks is eager to get all entities certified as soon as possible. In the meantime, we’re committed to providing the same HR support and award-winning customer service you expect of Justworks, regardless of the PEO entity.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.