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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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.

Asian Health Services, Oakland, CA

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.

Ensight Skills Center, Inc, Fort Collins, CO

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

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

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. We

Thresholds, 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

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