How savvy nonprofits save on state unemployment taxes
When it comes to managing costs at nonprofits, taxes can be a curveball. While nonprofits are exempt from many taxes, they must meet the obligation to state unemployment insurance. All employers pay into state unemployment pools and even organizations with no actual UI claims have yearly costs associated with the unemployment tax.
Unlike other employers, nonprofits do have the opportunity to opt out of the fund and become self-reimbursing employers. After making this decision, nonprofits can enroll in a Unemployment Savings Program or a Bonded Service Program with First Nonprofit. The programs provide benefits to a number of nonprofits.
The most significant advantage of opting out of SUI tax pools is the immediate cost savings. New members with First Nonprofit saved an average of $24,780 dollars in their first year, from 2010 to 2014. That’s an average reduction of 30 percent. Other nonprofits have saved even more.
First Nonprofit helps every step of the way
While nonprofits can become self-reimbursing employers on their own, they open themselves up to potential financial risks if unemployment at their organization suddenly spikes. The programs provided by First Nonprofit can shield organizations from these risks and provide other benefits.
With First Nonprofit’s solutions, organizations will receive assistance in the process of opting out and selecting the program that offers the most cost savings. Organizations that pay into the savings program will have an asset that they can carry on their books and one that will be returned to them should they ever decide to discontinue their membership. The ability to pay into the program in equal payments made each quarter can help a nonprofit with its budget as well.
For information on how your organization can cost-effectively meet its unemployment insurance needs, contact First Nonprofit Companies at FNCUI@firstnonprofit.com or visit www.firstnonprofitgroup.com.