Wage base restart
A wage base restart can occur when a midyear employment-tax reporting change causes annual taxable-wage counters to begin again under a different employer or account.
Social Security, FUTA, and state unemployment programs apply annual taxable-wage limits under different rules. A PEO transition can change the reporting entity or account, but the result depends on CPEO status, worksite-employee treatment, federal successor rules, and each state’s law.
January 1 is often operationally simpler. A midyear transition can still work, especially when qualifying CPEO predecessor and successor treatment applies. Require an employee-level analysis of each federal and state wage base before choosing the effective date.