Credits 8. How does a Professional Employer Organization, as defined by MCL 206.609(2), determine compensation for the small business alternative credit disqualifier in accordance with MCL 206.671?
A PEO is disqualified based on amounts paid to its own officers and employees. MCL 206.671(8). Individuals leased to a PEO's client are not considered for calculating the PEO's disqualifiers. Under MCL 206.671, an entity is disqualified from taking the small business alternative credit if more than $180,000 is paid to a shareholder or officer. The term "shareholder" is defined as a person who owns outstanding stock in a corporation or a person that is a member of a business entity which files as a corporation at the federal level. MCL 206.609(5). Similarly, the term "officer" is defined to mean an officer of a corporation, including a person performing duties similar to an officer. MCL 206.617(10)(g).