Governor Rick Scott has announced that Florida employers will continue to pay the lowest possible rate for unemployment taxes (Florida calls them reemployment taxes) in 2017 because of Florida’s growing economy and strong job growth. The minimum tax rate will remain at $7.00 per employee in 2017. The $7.00 per employee minimum tax rate for 2017 is down from a high of $120.80 per employee in 2012. In just five years, Florida businesses have had their reemployment tax reduced by more than 94 percent, resulting in a savings of more than $3.5 billion.
Governor Scott said, “I’m proud to announce that Florida [employers] will continue to pay the lowest possible rate for [unemployment] taxes next year, because our economy has continued to grow and more private sector jobs have been created. Our efforts to make Florida the most business-friendly state in the nation has helped keep the cost of doing business low and created more than 1.2 million jobs in the last six years. We will continue to work each day to make Florida more competitive so our state can become the number one place for job creators and families to succeed.”
Florida businesses pay the unemployment tax as a percentage of the first $7,000 in wages for each employee. During the recession, the trust fund became insolvent in 2009, which resulted in rising payroll taxes. Over the past five years, Florida’s growing economy and private sector job growth rate has allowed the state to dramatically reduce the minimum reemployment tax rate. Additionally, the Reemployment Assistance Trust Fund has since grown to more than $3.2 billion under Governor Scott.
Nonprofits have options
The above applies to all Florida employers except 501(c)(3) organizations. 501(c)(3)s do not have to pay state unemployment insurance taxes. Many Florida nonprofits could save as much as 30 percent on their unemployment cost 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 claims administration and unemployment insurance taxes in ways that for-profits can only dream about.
Contact us today for more information concerning your nonprofit unemployment insurance tax advantages.