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Tuesday, April 17, 2012

Unemployment Tax……You Have Options

Posted by Armanino Nonprofit Team

A legal option available nationwide since 1972 allows nonprofits to opt out of their state’s unemployment tax system. In all states, 501(c) (3) organizations are allowed to pay for unemployment claims in one of two ways: the state unemployment insurance tax (SUI) or as a reimbursing employer paying your state only for claims paid to former employees. No matter which option you choose, your employees receive benefits to which they are entitled.

Many nonprofit organizations still do not realize they have this option. This option allows a nonprofit to reimburse the state for any unemployment claims/benefits paid, rather than pay unemployment taxes. This reimbursement option often saves a nonprofit hundreds or thousands of dollars annually. Today, more than 1,500 non-profit organizations save an average of $50 million annually, as reimbursing employers, compared to being unemployment taxpayers.

Controlling claims controls costs and in a tight economy every dollar helps. There are organizations in place that can help you be protected from overpayment errors, minimize the number of hearings by reviewing and analyzing claims quickly and thoroughly, and provide experienced hearings representation.

If you are interested in learning more about this option and how your non-profit organization might be able to save money, please contact Jim Johnson at

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