February 4, 2026
Organizations classified as 501(c)(3) nonprofits, governmental entities, and Tribal entities are exempt from paying Federal Unemployment Taxes (FUTA). However, Pennsylvania still requires most employers to pay state unemployment taxes (SUTA).
In Pennsylvania, 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 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 Pennsylvania employers take advantage of the reimbursement financing option with the Pennsylvania Department of Labor and Industry. 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.
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.
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.
The Ensight Skills Center has enjoyed working with First Nonprofit for several years. We are enrolled in their Unemployment Savings Program and although we have not required a lot of intervention, there have been a few times. I know others have dealt with the same problem of unemployment fraud over the last year and in our case, a call to First Nonprofit (they actually answer their phones) cleared up the issue. They also sent us a letter to send to all our employees telling them what they needed to do to prevent this in the future and protect themselves. What a relief! Over the years if I have questions or concerns, they are happy to listen, advise and help if they can. Another BIG advantage of using First Nonprofit is that all the money that is paid into the Unemployment Savings Program lives on my balance sheet as an asset. The money continues to be Ensight’s not the governments. First Nonprofit has certainly given me peace of mind.
In addition to their money-saving purpose on behalf of nonprofit organizations like AHS, First Nonprofit’s Nonprofit Unemployment Fund streamlines the information we need to efficiently manage unemployment claims. Our relationship with NU Fund gave us access to such things as advice on planning for what’s ahead and how to analyze cost scenarios when unexpected events occurred. Both experiences were very helpful.
We have had a great experience with FNP. During Covid, when there was the chance that reimbursable nonprofits would have to pay 50% of the unemployment costs, FNP went to bat for us. We would receive weekly information on the Unemployment claim and how they were working to reduce the costs to reimbursable nonprofits. They have a great service also working with [our claims administrator] to make sure all the paperwork is completed correctly for any unemployment claim.