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TriNet

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ERC
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Other company
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ERC
Updated

The profile

A professional employer organization that files payroll taxes for small businesses under its own name, and so filed their Employee Retention Credit claims too. Its books carried ERC refunds waiting at the IRS of $311 million at the end of 2023, $831 million at the end of 2024 and $384 million at the end of 2025, and it warns investors the IRS holds PEOs responsible for clients' rejected claims.

Identity and role

TriNet Group, Inc. describes itself as "a leading provider of HR solutions for SMBs," offering benefits, payroll and payroll tax administration, risk mitigation and compliance services. As a professional employer organization (PEO) it co-employs its clients' workers and files their payroll taxes. In 2025 it processed $70 billion in payroll and payroll taxes and ended the year with about 323,200 worksite employees, down from about 360,700 a year earlier, according to its annual report.

Pandemic-relief role

Small businesses that used a PEO often claimed the Employee Retention Credit (ERC) through it, on amended payroll returns the PEO filed. TriNet records those pending refunds as "other payroll assets," with a matching liability to the clients: "Included in these receivables are ERTC and other credits that we have filed returns for on behalf of our clients."

DateERC receivablesAlready distributed to clients
Dec. 31, 2023$311 million$68 million
Dec. 31, 2024$831 million$72 million
Dec. 31, 2025$384 million$19 million
Mar. 31, 2026$334 million$22 million

The balance is money owed by the IRS and passed through to clients, not TriNet revenue. The company's reports blame the wait on "processing backlogs and a temporary halt in September 2023 in processing new ERTC claims at the IRS," and the 2025 report adds: "While the IRS processed a substantial number of claims in 2025, many SMBs continue to wait for their credits to be processed."

The liability question

The annual reports for 2024 and 2025 carry the same two sentences. The first: "The IRS has taken positions that we and other PEOs, rather than clients, are responsible for client errors and repaying rejected tax credit claims under these and similar programs." The second: "the IRS has taken positions that the tax benefits under some of these programs should be calculated on an aggregate PEO, rather than individual client, basis." Clients are contractually bound to repay rejected credits, TriNet says, but "a contract does not guarantee our ability to recover" them.

The IRS's February 2025 Chief Counsel memo PMTA 2025-01 addresses one version of that question. It concluded that an aggregate Form 941 or 941-X filed by a third-party payer under its own EIN to claim the ERC for clients "is not a valid return for the clients" without a Schedule R allocating the amounts among them. The memo does not name TriNet.

TriNet has fought the IRS over a PEO's status before. From 2004 to 2009 Gevity HR, a PEO TriNet later acquired, claimed FICA tip credits for its restaurant clients; the IRS denied $10,567,468, arguing Gevity was not the employer. In November 2020 the Eleventh Circuit held that Gevity was the statutory employer. The IRS answered with an Action on Decision recommending nonacquiescence: it "disagrees with the Eleventh Circuit's new test."

No enforcement action against TriNet over the ERC appears in the records we reviewed.

Where they are now (2025–2026)

The March 2026 quarterly report is the last filing we reviewed: $334 million of ERC refunds still pending.

Sources

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