Unemployment insurance tax relief on its way for NV business, nonprofits

October 16, 2013

Unemployment insurance tax relief on its way for NV business, nonprofits

To ensure the creation of more jobs, the state of Nevada Employment Security Council is recommending that the average unemployment insurance tax rate on employers be lowered from 2.25 percent to 2.1 percent, according to the Las Vegas Sun. In addition to lowering the rate, the state will also issue bonds to pay down federal loan debt.

Retiring debt limits federal control
Employers and nonprofits throughout the country have struggled with increasing UI tax rates levied to pay off federal loans. Loans from the federal government to cover UI must be settled after two years or the UI tax on employers in the state rises every year thereafter until the debt is repaid. At the height of the recession, Nevada owed more than $800 million dollars to the federal government. According to an infographic published by Investors Business Daily, Nevada owed around $510 million as of mid-September 2013.

Nevada is considering issuing bonds to pay its federal loan debt, which will once again allow the state to fund UI on its own terms.The bonds, to be issued between $580 million and $600 million, would retire the debt and halt the automatic UI tax increases. The rate on new employers would stay above the new average for three years to build up state UI funds and avoid federal borrowing during a future downturn.

Nonprofits should consider opting out
Nonprofits in the state also have an option for escaping increasing UI tax rates, and they can exercise it regardless of what the state legislature decides to do. Nevada nonprofits, and those around the country, can take advantage of self-reimbursement, which allows them to opt out of the state UI tax pool. Nonprofits then pay the state only what was actually paid out in UI claims to their former employees. Depending on the nonprofit and the state its located in, savings with self-reimbursement can run as high as 30 percent to 50 percent.

This option does, however, come with risks and those are magnified during tough economic times. To avoid the risks associated with self insuring, nonprofits can utilize options available through groups such as First Nonprofit, which help states realize the same level of savings with less risk and uncertainty.

"The Alliance for Nevada Nonprofits (ANN) has been watching how First Nonprofit Group has served nonprofits through other state associations of nonprofits for a while now. We realize that the savings that First Nonprofit brings to nonprofits is huge and one benefit ANN has been wanting to bring to our members state-wide," said Phil Johncock, executive director for ANN. "So, when we had the first opportunity to partner with First Nonprofit, we took it. Not only will our current members benefit but we feel that savings will attract new ANN members."

The great recession has illustrated the risks of state UI tax pools, which can punish private, for-profit businesses for poor preparation by state governments. Nonprofits can avoid that risk by self-reimbursing, if their organization would benefit from the change.


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First Nonprofit has saved us so much money over the state’s program. We had one little glitch with the state recently and we contacted FNP immediately. FNP staff called us back immediately and moved to remedy the problem.

WI Council of Religious & Independent Schools (WCRIS), Madison, WI

First Nonprofit has been a great partner. They have helped us saved hundreds of thousands of dollars! They have awesome resources for our nonprofit organization. Thanks for the partnership.

Community Care Inc., Milwaukee, WI

Life is certainly busy these days but having business partners like First Nonprofit has made some of the process hassle free. We have worked with this team for years. When we changed payroll systems, they outlined every step. I think this team is terrific and I know they get the job done! Thank you, Cruz, to all the team at FNP.

Gulfside Healthcare Services, New Port Richey, FL

FNP has helped our agency to save thousands of dollars every year on our unemployment coverage. The service is phenomenal, and we are thankful to their team as our partner. My experience working with Marshall on the advocacy around UE for nonprofits was also a highlight as someone who teaches advocacy and lobbying for nonprofits. Really, your whole team is top shelf, so thank YOU!

Advancing Academics, Turtle Creek, PA

Chicago Children’s Theatre has greatly benefited from our partnership with First Nonprofit, and I have always enjoyed working with the staff on our filings and any complicated questions. I would not hesitate to recommend First Nonprofit to fellow nonprofits. We’re very happy customers.

Chicago Children’s Theatre, Chicago, IL

FNP is a great resource for Daniel Kids. To have a TPA that we can count on to take point on not only managing our unemployment claims, but to support and guide any protest hearing, is invaluable. All the professional support staff we have worked with have been excellent, very knowledgeable and responsive. We are grateful for the help and support, thank you.

Daniel Kids, Jacksonville, FL

When I first began in my position at my organization, I hadn’t had experience working with a company like FNP. The staff was so patient and helpful in helping to explain the benefits of First Nonprofit. Anytime I reach out with a question I receive a quick, clear, and thorough response. I’m so thankful that we decided to partner with FNP. Their excellence in customer service, coupled with their variety of packages frees us up to truly serve our staff and community with a peace of mind knowing that our organization is protected against unanticipated unemployment insurance expenses.

Homes of Hope, Chicago, IL

First Nonprofit gets an A+ in my book. You are so easy to work with & very knowledgeable! Whether it is my quarterly correspondence with Kim or my random interactions with Dawn about a bond … I am so pleased that I get to work with such a helpful company. Thank you!

Women's Choice Network, Pittsburgh, PA