---
kind: "section"
citation: "26 U.S.C. § 3511"
title: "26"
title_heading: "Internal Revenue Code"
number: "3511"
heading: "Certified professional employer organizations"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/3511"
units:
  - "Subtitle C — Employment Taxes"
  - "Chapter 25 — General Provisions Relating to Employment Taxes"
---

# §3511. Certified professional employer organizations

- (a) **General rules—** For purposes of the taxes, and other obligations, imposed by this subtitle—
  - (1) a certified professional [employer](/usc/26/3231.md?p=a) organization shall be treated as the [employer](/usc/26/3231.md?p=a) (and no other person shall be treated as the [employer](/usc/26/3231.md?p=a)) of any work site [employee](/usc/26/3121.md?p=d) performing [services](/usc/26/3231.md?p=e-2-C-i) for any customer of such organization, but only with respect to remuneration remitted by such organization to such work site [employee](/usc/26/3121.md?p=d), and
  - (2) the exemptions, exclusions, definitions, and other rules which are based on type of [employer](/usc/26/3231.md?p=a) and which would (but for [paragraph (1)](#a-1)) apply shall apply with respect to such taxes imposed on such remuneration.
- (b) **Successor employer status—** For purposes of sections [3121(a)(1)](/usc/26/3121.md?p=a-1), [3231(e)(2)(C)](/usc/26/3231.md?p=e-2-C), and [3306(b)(1)](/usc/26/3306.md?p=b-1)—
  - (1) a certified professional [employer](/usc/26/3231.md?p=a) organization entering into a service [contract](/usc/26/101.md?p=f-3-A) with a customer with respect to a work site [employee](/usc/26/3121.md?p=d) shall be treated as a successor [employer](/usc/26/3231.md?p=a) and the customer shall be treated as a predecessor [employer](/usc/26/3231.md?p=a) during the term of such service [contract](/usc/26/101.md?p=f-3-A), and
  - (2) a customer whose service [contract](/usc/26/101.md?p=f-3-A) with a certified professional [employer](/usc/26/3231.md?p=a) organization is terminated with respect to a work site [employee](/usc/26/3121.md?p=d) shall be treated as a successor [employer](/usc/26/3231.md?p=a) and the certified professional [employer](/usc/26/3231.md?p=a) organization shall be treated as a predecessor [employer](/usc/26/3231.md?p=a).
- (c) **Liability of certified professional employer organization—** Solely for purposes of its liability for the taxes and other obligations imposed by this subtitle—
  - (1) a certified professional [employer](/usc/26/3231.md?p=a) organization shall be treated as the [employer](/usc/26/3231.md?p=a) of any individual (other than a work site [employee](/usc/26/3121.md?p=d) or a person described in [subsection (f)](#f)) who is performing [services](/usc/26/3231.md?p=e-2-C-i) covered by a [contract](/usc/26/101.md?p=f-3-A) meeting the requirements of [section 7705(e)(2)](/usc/26/7705.md?p=e-2), but only with respect to remuneration remitted by such organization to such individual, and
  - (2) the exemptions, exclusions, definitions, and other rules which are based on type of [employer](/usc/26/3231.md?p=a) and which would (but for [paragraph (1)](#c-1)) apply shall apply with respect to such taxes imposed on such remuneration.
- (d) **Treatment of credits—**
  - (1) **In general—** For purposes of any credit specified in [paragraph (2)](#d-2)—
    - (A) such credit with respect to a work site [employee](/usc/26/3121.md?p=d) performing [services](/usc/26/3231.md?p=e-2-C-i) for the customer applies to the customer, not the certified professional [employer](/usc/26/3231.md?p=a) organization,
    - (B) the customer, and not the certified professional [employer](/usc/26/3231.md?p=a) organization, shall take into account [wages](/usc/26/3121.md?p=a) and [employment](/usc/26/3121.md?p=b) taxes—
      - (i) paid by the certified professional [employer](/usc/26/3231.md?p=a) organization with respect to the work site [employee](/usc/26/3121.md?p=d), and
      - (ii) for which the certified professional [employer](/usc/26/3231.md?p=a) organization receives payment from the customer, and
    - (C) the certified professional [employer](/usc/26/3231.md?p=a) organization shall furnish the customer and the Secretary with any information necessary for the customer to claim such credit.
  - (2) **Credits specified—** A credit is specified in this paragraph if such credit is allowed under—
    - (A) [section 41](/usc/26/41.md) (credit for increasing research activity),
    - (B) [section 45A](/usc/26/45A.md) (Indian [employment](/usc/26/3121.md?p=b) credit),
    - (C) [section 45B](/usc/26/45B.md) (credit for portion of [employer](/usc/26/3231.md?p=a) social security taxes paid with respect to [employee](/usc/26/3121.md?p=d) cash tips),
    - (D) [section 45C](/usc/26/45C.md) (clinical testing expenses for certain drugs for rare diseases or conditions),
    - (E) [section 45R](/usc/26/45R.md) ([employee](/usc/26/3121.md?p=d) health insurance expenses of small [employers](/usc/26/3231.md?p=a)),
    - (F) [section 45AA](/usc/26/45AA.md) (military spouse retirement plan eligibility credit),
    - (G) [section 51](/usc/26/51.md) (work opportunity credit),
    - (H) [section 1396](/usc/26/1396.md) (empowerment zone [employment](/usc/26/3121.md?p=b) credit), and
    - (I) any other section as provided by the Secretary.
- (e) **Special rule for related party—** This section shall not apply in the case of a customer which bears a relationship to a certified professional [employer](/usc/26/3231.md?p=a) organization described in section [267(b)](/usc/26/267.md?p=b) or [707(b)](/usc/26/707.md?p=b). For purposes of the preceding sentence, such sections shall be applied by substituting “10 percent” for “50 percent”.
- (f) **Special rule for certain individuals—** For purposes of the taxes imposed under this subtitle, an individual with net earnings from self-[employment](/usc/26/3121.md?p=b) derived from the customer’s trade or business (including a partner in a partnership that is a customer) is not a work site [employee](/usc/26/3121.md?p=d) with respect to remuneration paid by a certified professional [employer](/usc/26/3231.md?p=a) organization.
- (g) **Reporting requirements and obligations—** The Secretary shall develop such reporting and recordkeeping rules, regulations, and procedures as the Secretary determines necessary or appropriate to ensure compliance with this title by certified professional [employer](/usc/26/3231.md?p=a) organizations or persons that have been so certified. Such rules shall include—
  - (1) notification of the Secretary in such manner as the Secretary shall prescribe in the case of the commencement or termination of a service [contract](/usc/26/101.md?p=f-3-A) described in [section 7705(e)(2)](/usc/26/7705.md?p=e-2) between such a person and a customer, and the [employer](/usc/26/3231.md?p=a) identification number of such customer,
  - (2) such information as the Secretary determines necessary for the customer to claim the credits identified in [subsection (d)](#d) and the manner in which such information is to be provided, as prescribed by the Secretary, and
  - (3) such other information as the Secretary determines is essential to promote compliance with respect to the credits identified in [subsection (d)](#d) and [section 3302](/usc/26/3302.md), and

  shall be designed in a manner which streamlines, to the extent possible, the application of requirements of this section and [section 7705](/usc/26/7705.md), the exchange of information between a certified professional [employer](/usc/26/3231.md?p=a) organization and its customers, and the reporting and recordkeeping obligations of the certified professional [employer](/usc/26/3231.md?p=a) organization.

- (h) **Regulations—** The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.

## Source credit

(Added Pub. L. 113–295, div. B, title II, § 206(a), Dec. 19, 2014, 128 Stat. 4065; amended Pub. L. 117–328, div. T, title I, § 112(c), Dec. 29, 2022, 136 Stat. 5295.)

## Notes

### Editorial Notes

### Amendments

2022—Subsec. (d)(2)(F) to (I). Pub. L. 117–328 added subpar. (F) and redesignated former subpars. (F) to (H) as (G) to (I), respectively.

### Statutory Notes and Related Subsidiaries

### Effective Date of 2022 Amendment

Amendment by Pub. L. 117–328 applicable to taxable years beginning after Dec. 29, 2022, see section 112(e) of Pub. L. 117–328, set out as a note under section 38 of this title.

### Effective Date

Section applicable with respect to wages for services performed on or after January 1 of the first calendar year beginning more than 12 months after Dec. 19, 2014, see section 206(g)(1) of Pub. L. 113–295, set out as an Effective Date of 2014 Amendment note under section 3302 of this title.