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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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