05/02/2023

Five Unemployment Insurance Options for Nonprofits

Almost 86 percent of nonprofits are overpaying SUI taxes

Associations must pay for unemployment benefits just like any business, but did you realize a federal exemption gives nonprofits unique flexibility in funding for their unemployment claims?

501(c)(3) nonprofits can opt to reimburse the state dollar for dollar as “reimbursable employers” for any unemployment claims paid out to their employees, instead of contributing to State Unemployment Insurance (SUI) programs by paying taxes.

The reality is that almost 86 percent of nonprofits are overpaying SUI taxes. Since many states have raised tax rates on unemployment funds, associations could be paying up to $2 in unemployment taxes for every $1 in employee claims.

Please select this link to read the complete article from ASAE’s Center for Association Leadership.