The Idaho Department of Labor has announced that Idaho’s standard unemployment insurance tax rate for 2017 will decrease by 6.3 percent to 1.395 percent, down from 1.488 percent in 2016. This follows the rate decrease between 2015 and 2016 of 6 percent.
This decrease is made possible buy the state’s low unemployment rate and the fact that the state’s unemployment insurance trust fund remains solvent with a balance of $674 million.
Almost five years ago, Idaho was forced to sell approximately $202 million in bonds to pay a debt it owed to the federal government to cover more than $600 million in unemployment insurance benefits paid out during the Great Recession.
“If Idaho fell into recession today – one roughly the same size as it did during the Great Recession – the state should not need to borrow any money,” said Labor Director Ken Edmunds. “When it comes to unemployment insurance tax rates, businesses want consistency, so they know what the future holds.”
Individually, each Idaho employer falls into one of 13 rate classes, which range between 0.399 and 5.4 percent based on an experience rating calculated against the volume of unemployment insurance claims filed against their accounts.
All rate classes will see a reduction with the exception of the most deficit-rated employers whose rate is fixed at 5.4 percent as required by federal conformity law.
Nonprofits have options
The above applies to all Idaho employers except 501(c)(3) organizations. 501(c)(3)s do not have to pay state unemployment insurance taxes. Many Idaho 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.