The below applies to many employers except 501(c)(3) organizations. 501(c)(3)s do not have to pay state unemployment insurance taxes – high or low. Many nonprofits could save as much as 30 percent or more on their unemployment costs by opting out of the unemployment insurance tax system – an advantage provided to them by the IRS. Doing so affords nonprofits unique avenues that allow them to strategically handle unemployment risk in ways that for-profits can only dream about.
Contact us today for more information concerning your nonprofit unemployment insurance tax advantages.
This time of year many states begin to prepare employers for any changes in the unemployment insurance tax structures. Changes can be made to the tax rates themselves and/or the taxable wage base. Here are a few recent announcements.
Alaska’s unemployment-taxable wage base will rise to $41,500 in 2020, up from $39,900 in 2019, a spokesman for the state Department of Labor and Workforce Development told Bloomberg Tax. Effective Jan. 1, 2020, tax rates for nondelinquent experienced employers are to range from 1% to 1.09%.
Hawaii’s unemployment-taxable wage base is to increase for 2020 to $48,100, up from $46,800 in 2019. Hawaii’s unemployment tax rates for 2020 are to be released in late December. The details can be found here.
Idaho’s unemployment tax rates are to increase in 2020, according to state Labor Department website. Effective Jan. 1, 2020, unemployment tax rates for experienced employers are to range from 0.255% to 0.849% for positive-rated employers (up from from 0.251% to 0.836%) and from 1.527% to 5.4% for negative-rated employers (up from 1.505% to 5.4%).
Minnesota’s unemployment-taxable wage base will increase $1,000 to $35,000 for 2020, a spokesman for the state Department of Unemployment Insurance told Bloomberg Tax in an email. Unemployment tax rates for experienced employers will remain unchanged in 2020.
New Jersey’s taxable wage base for unemployment insurance is increasing in 2020. The wage base for employer contributions to unemployment insurance is set to be $35,300, increased from $34,400. Read more here.
North Carolina’s unemployment-taxable wage base will rise to $25,200 for 2020, up from $24,300 in 2019, a spokesman for the state Department of Commerce told Bloomberg Tax. The state’s unemployment insurance taxes rates will remain unchanged for 2020.
Unemployment tax rates for employers subject to Oregon payroll tax will move to tax schedule two for the 2020 calendar year. In part, this means that the state’s unemployment-taxable wage base will increase to $42,100, up from $40,600 for 2019. Tax schedule two includes an average rate of 1.73 percent for the first $42,100 paid to each employee. Read more here.
Washington State has increased its state unemployment insurance taxable wage base to the first $52,700 of each employee’s wages for 2020. This is an increase of $2,900 from 2019. Washington’s taxable wage base is the highest in the country and has increased by more than $15,000 over the past decade. Read more.
501(c) Services, a 100% employee owned organization, has nearly 40 years of experience in providing full-service alternatives to state-run unemployment insurance programs, and provides services to over 1,500 nonprofits nationally. We administer the 501(c) Agencies Trust, which offers a comprehensive suite of risk management services and multiple stop-loss protection solutions for its 501(c)(3) nonprofit members, and UInsure*, a first dollar unemployment insurance program for 501(c)(3)s, government entities, and tribally owned businesses. We also operate Nonprofit HR Services – a confidential resource available to help walk nonprofits through difficult personnel issues.
To see if your organization would financially benefit from our services, please complete a Request for Information Form today.
*UInsure is not available in all states.