The Small Business Efficiency Act and Its Importance to AMERICA’S SMALL BUSINESSES

The President signed the Small Business Efficiency Act (SBEA) shortly after Senate approval. It was previously approved by the House of Representatives as a provision in the ABLE Act to off-set the costs associated with that proposal, then incorporated into the tax extenders legislation.  This bill passed both chambers with large (and rare) bipartisan support.

Passage of the SBEA is the culmination of many, many years of hard work by many people. Our Congressional champions – Representatives Kevin Brady (R-TX), Mike Thompson (D-CA), along with Senators Chuck Grassley (R-IA), and Bill Nelson (D-FL) worked tirelessly to find a legislative vehicle for the SBEA. Every NAPEO member who met with their Member of Congress, sent a letter, or weighed in, own part of this success.  It is a victory for all those who worked so hard for so long to get this done. It at last provides certainty and legitimacy for us at the federal level.

What Does the SBEA do?

    • Creates a certification process for PEOs within the IRS;
    • Gives certified PEOs (CPEOs) the clear statutory authority to collect and remit federal employment taxes;
    • Eliminates the wage base restart for PEO clients join or leave a PEO relationship; and,
    • Codifies that customers of CPEOs will qualify for specified federal tax credits that the customers would be entitled to claim if there were no PEO relationship.

Next Steps

    • The IRS must issue regulations to implement the SBEA. The regulations to implement the certification program must be issued by July 1. Any additional regulations implementing the SBEA must be issued by the IRS no later than January 1, 2016.
    • The SBEA becomes effective on January 1, 2016.


The IRS plans to begin accepting applications for PEO certification beginning July 1, 2016.  See IRS Announcement.

This entry was posted in H.R. 2466 by Greg Slamowitz. Bookmark the permalink.

About Greg Slamowitz

Greg Slamowitz ( is an entrepreneur, investor, author and speaker. He was a co-founder and former Co-CEO of Ambrose Employer Group, LLC, a professional employer organization (PEO), which was ranked among Crain’s New York’s list of the 50 fastest growing companies and was also recognized by the New York State Society for Human Resource Management as one of the “Best Companies to Work For in New York.” Greg co-founded Ambrose in 1997 with $95,000, never accepted outside funding, and sold Ambrose to Trinet (TNET) in July 2013 in a $200 million cash transaction. Greg has also invested in, and is on the board of, a number of early stage companies. Greg enjoys learning and teaching and has spent considerable time over the last several years meeting with entrepreneurs and business leaders and regularly presents his seminar, “Flip the Pyramid”, around the United States. Read about Greg’s presentation to the Morris (NJ) Tech Meetup. Greg’s book titled “Flip the Pyramid: How Any Organization Can Create a Workforce That Is Engaged, Empowered, Aligned and On Fire!” is available on Amazon, Barnes & Noble and iTunes/iBooks. Greg has also spent considerable time in Washington DC with members and staffers of the U.S. Senate and House of Representatives educated them about the challenges to and solutions for America’s businesses. He was a board member and president of the his industry’s trade association and founded and led its political action committee (PAC). Greg was instrumental in the passage of the Small Business Efficiency Act. Greg is passionate about helping America’s businesses focus on growth, profit, hiring and creating an awesome and healthy experience for each and every working American. Greg was the recipient of the 2001 Ernst & Young New York Entrepreneur of the Year® award in the employment services category. Greg also serves on the Dean’s Advisory Board for Emory University’s School of Law. Prior to co-founding Ambrose in 1997, Greg practiced tax law with Brown & Wood (now Sidley Austin Brown & Wood) in New York City. He holds two law degrees – a Master of Laws in Taxation from New York University School of Law, and a Juris Doctorate, with distinction, from Emory University School of Law in Atlanta. He received his undergraduate degree, cum laude, from New York University. Please visit Greg’s website, his LinkedIn Profile and Twitter @gregslamowitz His passions include developing highly functional organizations, engaged cultures, growth companies, health care and wellness, skiing and sailing (