Colorado organizations has recently received its “Unemployment Insurance Rate Notice” from the State of Colorado. This document can help you uncover any unemployment insurance tax overpayments. It can be used to help identify the savings your organization could obtain by exercising your right as a 501(c)(3) to not pay state unemployment insurance taxes and become a pay-as-you-go employer.
To find out if you are overpaying your unemployment insurance taxes, take a look at the figures below that we are highlighting.
The Colorado tax rate notice is very straight forward. The only thing it lacks is annual claims data. The state instead provides you with cumulative data dating back to when your organization began paying taxes.
Your new tax rate for 2019 is entered as Item 10. The last number listed in the second chart.
You can uncover your overpayment in the first chart.
Item 2 shows how much state unemployment insurance tax your organization has paid since its inception.
Item 3 shows how much the state has paid out on your organization’s behalf in unemployment insurance benefits to your separated employees over the same time period.
Item 4 shows the difference between Item 2 and Item 3.
Do you notice a huge difference? Has your organization paid the state a significant amount of taxes that far exceed what the state pays your separated employees in unemployment benefits?
If so, your organization is a prime candidate for paying your state unemployment claims as you go instead of pre-paying them through a tax. Leaving the state unemployment insurance pool makes sure the figure in Item 4 never gets any larger, but instead sends future overpayments to your budget for your mission.
If you would like to confirm your overpayment, you can use our online calculator. It’s set up to uncover these overpayments using just your tax rate notice.
After you’ve used our overpayment calculator to uncover any potential savings through unemployment reimbursing, feel free to contact me for more details about how we can help return any overpayment to your budget.
Good luck with your calculations!
501(c) Services has more than 35 years of experience in providing full-service alternatives to state-run unemployment insurance programs, and provides services to over 1,500 nonprofits nationally. It is the administrator of 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.