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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We first started using First Nonprofit’s Unemployment Savings Program when we were a small startup nonprofit.  We didn’t have an HR department and needed expertise in the event that an unemployment claim was made.  We knew we were eligible to be a reimbursing employer, but weren’t sure how to navigate that process.  They made it easy to set things up, plan for, and then manage claims when they came at a very reasonable cost. The amount of time and stress they’ve saved us dealing with all this has been worth way more than the cost.  We’ve now grown to a large nonprofit and do have an HR department but have no plans to stop using their services.  I highly recommend them to every nonprofit I come into contact with!


Throughout our membership in the Unemployment Savings Program, First Nonprofit understood our demands, community dynamics, and the importance of seamless services; that allowed us to serve our constituents better.

Prevent Blindness America, Chicago, IL

Because INCS advocates for the operating conditions that allow charter public schools to provide high quality public education, partnering with First Nonprofit was an easy decision. First Nonprofit’s unemployment programs provide our member schools two operating elements crucial to their ability to provide high quality public education: savings and budget certainty. Capable, committed teachers are the key to student success. By participating in the unemployment insurance savings plan, charter public schools gain peace of mind and are able to invest more money in their teachers.

Illinois Network of Charter Schools, Chicago, IL

It has been our sincere pleasure to maintain a strong, vibrant business partnership with First Nonprofit. We greatly admire their strong industry knowledge, technical expertise, constant professionalism, knowledgeable and dedicated staff. They are always extremely responsive, personable and provide us with the necessary guidance and recommendations on a numerous variety of employment scenarios.

Thresholds, Chicago, IL

NYCON members who use First Nonprofit’s programs enjoy enduring savings and improved efficiency. Our association knows that success, because from the beginning, we achieved the same great benefits. Great savings, seamless technology, and responsive service. NYCON highly recommends First Nonprofit’s remarkable unemployment solutions.

New York Council of Nonprofits, Albany, NY

Visually Impaired Preschool Services has been a client of First Non-Profit since it was first offered as a benefit of VisionServe Alliance. We completed a thorough evaluation of cash savings to our agency before taking advantage of this wonderful benefit and it has been a very wise decision. Our experience with the processes from accounting to claims have been professional, expeditious and easy.

Visually Impaired Preschool Services, Louisville, KY

Luckily for us, our interactions regarding any issues with staffing has been very minimal! I can say that all other interactions with regards to billing, 941 reporting, etc. have been extremely pleasant, accommodating and easy to work with. Kim Ghanayem is always prompt, professional and friendly. Thank you so much!

Neurologic Music Therapy Services of Arizona, Phoenix, AZ

First Nonprofit has been easy to work with and makes the administrative process easier and smoother. We enjoy working with you.

Visually Impaired Preschool Services, Louisville, KY