January 23, 2026
Organizations classified as 501(c)(3) nonprofits, governmental entities, and Tribal entities are exempt from paying Federal Unemployment Taxes (FUTA). However, New York still requires most employers to pay state unemployment taxes (SUTA).
In New York, only religious organizations that operate exclusively for religious purposes are exempt from SUTA. All other employers, including most nonprofits, Tribes, and government entities, must finance their unemployment obligations—but they have a unique choice in how they do it.
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The following employers can choose how they fund their unemployment costs:
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These employers can cover their mandatory unemployment costs in one of two ways:
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Reimbursement financing through an FNP Program can significantly reduce costs for many organizations because you pay only for actual claims, not for a tax calculated on your total taxable payroll. However, this option should be part of a broader risk‑management strategy because unbudgeted spikes in unemployment claims can strain cash flow. A long‑term plan and appropriate protections can help limit claim liability and stabilize year‑to‑year costs.
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First Nonprofit (FNP) helps eligible New York employers take advantage of the reimbursement financing option with the New York Department of Labor. With the right structure and support, organizations can save as much as 60% annually on unemployment costs while still meeting all state requirements.
FNP provides:
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Contact First Nonprofit to determine your eligibility for reimbursement financing and explore potential savings.
Click here to request a free, no-obligation savings evaluation on your organization’s unemployment costs.
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Related Article: Frequently Asked Questions About FUTA and SUTA for Nonprofit, Native American Tribes, and Government Entities
Ready to chat? Get in touch today to request a no-obligation savings evaluation.
PORT Health Services has had a great experience with the Unemployment Savings Program offered through First Nonprofit. Throughout the years we have been involved in the program, we have increased our reserve account significantly through this program and find the reporting we receive both timely and useful. We look forward to our continued involvement with this program and our connection with First Nonprofit for many years to come.
Job One was spending a lot of money on unemployment. Our insurance broker, Mark Simcosky, recommended that we switch over to First Nonprofit. We did just that! This switch has been a huge savings for us! This switch saved us over $10,000 in the first year. Their customer service is Superior! Any time we have a question, we get a response very quickly. Any time we send them a report and they have a question; they call rather than just assuming. They were very responsive during COVID, even when they were in crisis mode their selves. They also were always there when we needed during COVID and very helpful! We would 1,000% recommend First Nonprofit to anybody that could benefit from it!
My experience with FNP has always been positive. Every time I have had to contact them, I’m always put in contact with a friendly and knowledgeable person. If something is missing from our account, they reach out to us to request it. It’s nice to work with a company that makes sure our account is current. I would recommend them to any nonprofit looking to reduce their unemployment insurance costs.
We’ve saved tens of thousands of dollars PER YEAR by changing to become a reimbursing employer, freeing funds for much needed capital investment. FNP has been a valued partner in this process, providing assurance that we have stopgap coverage for extraordinary claims and keeping claims response painless and simple. It’s a huge Win/Win!
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!
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.
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.
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.