Tax bills that impact nonprofits continue to surface

March 28, 2014

Tax bills that impact nonprofits continue to surface

The New Hampshire House recently killed a bill that would have placed a new tax obligation on some of the state's nonprofits. While lowering the overall business tax from .75 percent to .68 percent, it would have required larger nonprofits to pay the tax for the first time, according to New Hampshire Public Radio.

Some members of the house expressed concern that the bill would place already fragile nonprofits and charities at risk. The motivation for the bill was based on the belief that some of the largest nonprofits employ many individuals and compete with companies in the private sector.

While the bill in New Hampshire failed, nonprofits across the nation have been met with increasing financial obligations to the communities that they serve as state and local governments look for ways to recover revenue lost during the recession.

The Chronicle of Philanthropy recently reported a tax plan announced to the U.S. House of Representatives would place a 25-percent surtax on nonprofits that pay more than $1 million to their employees. While the bill is predicted to be a tough sell during an election year, it still represents a changing attitude among lawmakers regarding the amount of tax that nonprofits should pay.

Organizations can still control UI costs
While nonprofits may be losing tax exemptions elsewhere, they can still save money on state unemployment insurance by becoming reimbursing employers. As a reimbursing employer, they are responsible only for the actual cost of claims submitted against their own organization, and do not need to make tax payments to state tax pools. However, organizations still need direction and a safety net when becoming reimbursers.

With unemployment savings programs, such as those offered by First Nonprofit Group, organizations can enjoy the cost savings of becoming a reimbursing employer but with less risk. Because nonprofits are still responsible for paying UI claim debt, without a savings plan UI costs could be devastating if unemployment suddenly spikes. 

UI programs come with the services of experts in the nonprofit field who can ensure that claims are paid correctly and on time. They can also help organizations choose from a number of different plans, based on unemployment history, size and other factors.

For information on how your organization can cost-effectively meet its unemployment insurance needs, contact First Nonprofit Group at or visit


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Working with Marshal Whittey at First Nonprofit has been a great experience. He handles our request as a priority and goes above and beyond to resolve any issues we have in a timely manner. Marshall follows through to the end and ensures our needs are met. He has been a great resource for LSC and our “go to” for any tax questions we may have. With LSC transitioning several facilities into one federal tax identification number, First Nonprofit was able to assist and provide guidance with best practices resolving claims to each entity. Additionally First Nonprofit provided knowledge (information materials) and one on one training to HRS group with best practices to handle claims state adjudicated, fraudulent claims, and appeals. And processing information in the First Nonprofit [unemployment claims] system allows for timely information can be collected.

Lutheran Services Carolinas, Salisbury, NC

My experience with FNP has been wonderful. Unemployment in general is quite confusing and FNP has simplified the process for us. Everyone we have reached out to or worked with has been very helpful and follows up to be sure we understand the information. I am so happy we made the switch to FNP!

Stone Valley Community Charter School, Huntingdon, PA

First Nonprofit smoothed the unemployment perils for our organization during Covid. Without the ability to cap our UI exposure, we would not have been able to weather the storm. The program worked perfectly and we have come out of the pandemic ready to forge on. Thanks FNP!

Jewish Silicon Valley, Los Gatos, CA

My experience with the FNP has been fantastic. The idea of setting funds aside for the unemployment tax liability is a bedrock for nonprofit organizations like mine, namely ASHBA; what is even more advantageous is having the FNP as a custodian of those funds. 100% recommended!

American Saddlebred Horse & Breeders Association, Inc., Lexington, KY

I would like to comment on my experience with FNP….to date our District has saved $1,000’s of dollars by being enrolled in the First Nonprofit program. My only regret is that we did not know about this method of paying unemployment tax years ago….as I had figured about five years

ago, had we enrolled 15-20 years ago, we could have saved our small school district upwards of $500,000 in payments to IDES. Also we would have had a pretty hefty sum of money in our Reserve Account. Thankfully I attended a workshop hosted by First Nonprofit back in 2015 which got the ball rolling!

Beardstown Community Unit School District 15, Beardstown, IL

I have worked with the First Non-Profit Team for many years, and I appreciate the quick response and care that Cecilia and the team provides anytime I have questions. While there are other providers that may provide like services, First Nonprofit will always be my first choice! I appreciate you!

Innovative Services, Inc., Green Bay, WI

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

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