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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
employment taxes for wages or compensation paid to
Part 4: Customer Relationship
individuals performing services for the clients.
Information
Answer “Yes” or “No” to the questions on lines 10–13. Line 12. Is the Customer Reported in Part 2 a
However, if you answer “No” to question 10, you may skip Related Party of the CPEO?
lines 11–13. A CPEO won’t be treated as the employer of an individual
performing services for the customer for purposes of federal
Line 10. Is the CPEO’s Relationship With the employment taxes if the customer is a related party, even if
Customer Reported in Part 2 Subject to a the CPEO’s relationship with the customer is subject to a
Contract Described Under Section 7705(e)(2)? CPEO contract. The customer is a related party if it has a
relationship with the CPEO as described in section 267(b) or
The CPEO’s relationship with the customer is subject to a
section 707(b), but substituting “10 percent” for any reference
contract described under section 7705(e)(2) (also called a
to “50 percent.”
CPEO contract) if the contract is in writing and, with respect
to an individual providing services for the customer pursuant Line 13. Does the CPEO Apply the Exemptions,
to the contract, provides that the CPEO will assume
responsibility for: Exclusions, Definitions, and Other Rules Which
Payment of wages or Railroad Retirement Tax Act (RRTA) Are Based On Type of Employer Under Sections
compensation to the individual(s) performing services for the 3511(a)(2) and 3511(c)(2) to the Customer
customer, without regard to the receipt or adequacy of Reported in Part 2?
payment from the customer;
For purposes of federal employment taxes, the exemptions,
Reporting, withholding, and paying any applicable federal
exclusions, definitions, and other rules that are based on type
employment taxes on the wages or RRTA compensation
of employer under sections 3511(a)(2) and 3511(c)(2) are
paid to the individual(s) performing services for the customer,
presumed to be based on the customer, and in most cases
without regard to the receipt or adequacy of payment from
“Yes” will be checked for this line. However, check the “No”
the customer;
box in the rare case that another entity is the common law
Providing employee benefits that the contract may require
employer of individuals performing services for the customer,
the CPEO to provide, without regard to the receipt or
and the exemptions, exclusions, definitions, and other rules
adequacy of payment from the customer; and
that are based on type of employer will be based on that
Recruiting, hiring, and firing individuals performing
entity.
services for the customer (in addition to the customer’s
responsibility for recruiting, hiring, and firing). Part 5: Customer Signature
Additionally, the CPEO must agree in the contract to Part 5 must be signed by a person who has the authority to
maintain employee records for the individual(s) performing execute Form 8973 for the customer listed in Part 2. By
services for the customer and to be treated as a CPEO for signing Part 5, you acknowledge that Form 8973, Parts 1, 2,
federal employment tax purposes in relation to the and 4 are, to the best of your knowledge and belief, true,
individual(s) performing services for the customer. correct, and complete.
If the CPEO’s relationship with the customer isn’t subject Customers can visit IRS.gov/CPEO for more
to a CPEO contract (“No” is checked on line 10), Form 8973 TIP information about the CPEO program and to access
must still be filed if the CPEO’s relationship with the customer the list of organizations (updated quarterly) that are
reported in Part 2 is subject to a service agreement certified by the IRS as CPEOs.
described under Regulations section 31.3504-2(b)(2). A
service agreement under Regulations section 31.3504-2(b) Part 6: CPEO Signature
(2) means an agreement that provides that the CPEO:
Part 6 must be signed by a person who has the authority to
Asserts it is the employer (or “co-employer”) for the
execute Form 8973 for the CPEO listed in Part 3. By signing
individual(s) performing services for the customer pursuant to
Part 6, you acknowledge, under penalties of perjury, that
the agreement;
Form 8973, Parts 1–4 are, to the best of your knowledge and
Pays wages or RRTA compensation to the individual(s)
belief, true, correct, and complete.
performing services for the customer pursuant to the
agreement; and Only the CPEO’s signature is required if you're telling
Assumes responsibility to collect, report, and pay, or TIP the IRS that a service contract has ended.
assumes liability for, employment taxes on the wages or
RRTA compensation paid by the CPEO to the individual(s)
performing services for the customer pursuant to the CPEO Consent to Disclosure of Tax
agreement. Information
Line 11. Is the Customer Reported in Part 2 a When filing Form 8973 to report the start of a service
contract, the CPEO must complete the CPEO Consent to
Provider of Employment-Related Services?
Disclosure of Tax Information.
The customer is a provider of employment-related services if
it provides: By signing, dating, and entering the CPEO’s EIN at the
Employment tax administration, bottom of the consent, you allow the IRS, to the extent
Payroll services, or necessary to carry out the purposes of the CPEO program, to
Other employment-related compliance services to clients. disclose information to the customer named on the consent
from the CPEO’s employment tax returns (for example,
Other employment-related compliance services may Forms 940 and 941) as it relates to the customer named on
include, but aren’t limited to, collecting, reporting, and paying
Instructions for Form 8973 (5-2017) -3-
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