April 25, 2024
501(c)(3) nonprofit, governmental, and tribal entities are all exempt from paying Federal Unemployment Taxes (FUTA). However, in Puerto Rico, most employers must pay state unemployment taxes (SUTA), with only religious entities that operate exclusively for religious purposes exempt from Puerto Rico SUTA. But the following organizations have a unique savings option for paying SUTA:
– Nonprofits: Organizations that are exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code
– Native American Indian tribes: Tribes and their wholly owned businesses
– Government entities: Government entities such as federal, state, and local government agencies
These entities can cover their mandatory unemployment costs in one of two ways: paying the state unemployment insurance tax (SUTA) or choosing reimbursement financing (self-insurance). The latter option is a legal right allowing these organizations to opt out of paying SUI taxes and to reimburse their state unemployment agency dollar-for-dollar for unemployment claims paid to former employees.
Though opting out of paying SUTA can save employers money in the short term, a well-thought-out strategic plan should accompany the decision to change unemployment financing and how to pay for future unemployment to limit claim liability. First Nonprofit (FNP) helps nonprofit employers utilize this option with the Puerto Rico Department of Labor and Human Resources, saving organizations as much as 50% annually! Contact FNP to help determine eligibility for reimbursement financing. Click here to request a free, no-obligation savings evaluation on your organization’s unemployment costs.
Ready to chat? Get in touch today to request a no-obligation savings evaluation.
I am LOVING the Mineral platform. It has been a lifesaver for someone like me leading a small not-for-profit without a dedicated HR person.
We’ve been a member of First Nonprofit’s Unemployment Savings Program since 2011 and highly recommend joining. The program is terrific and allows us to earn interest on our own funds while still meeting the state’s requirements on unemployment payments. In addition, the staff are great and always helpful sorting out any questions we may have. Thank you all!
CCSCT was approached by First NonProfit to discuss its Unemployment Savings Program and ways the program could significantly reduce the amount of unemployment taxes we were paying. At the time, our agency was paying approximately $80,000 per year. First NonProfit conducted an analysis to determine if making the switch would be in our best interest, and it clearly was based on our circumstances. The first year on the program, CCSCT saw a 70% reduction in its unemployment costs and each year, continues to experience further reductions as a result of having minimal claims. Some additional benefits of the program including having a fixed annual cost, an interest-baring reserve account, professional unemployment claims management and representation at all unemployment hearings. This has been one of the best decisions we have made.
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.
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.
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.
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.