Iowa is finally pushing their unemployment claims system away from automated filing by phone to an online application. Unemployment claims in the state will have to be filed online after the telephone option is phased out October 1, 2016 by the Iowa Workforce Development Unemployment Insurance Division.
Employers and businesses should benefit from the move to online only filing. Such a move should reduced administrative costs. State officials also believe that the integrity of the state’s unemployment insurance trust fund will be maintained by reducing incidents of fraud by eliminating improper payments, helping to lower employers’ taxes.
The national unemployment insurance system is run on the state level. Every state maintains their own unemployment insurance pool supplied by their own unique tax structure. The taxes levied on employers for unemployment insurance are not only based on a specific employer’s unemployment claims history, but also include a percentage for the administration of the unemployment system. The more bureaucratic and less efficient a state unemployment system; the more it costs employers.
Fortunately, 501(c)(3) charities don’t have to worry about how well a state unemployment insurance pool is managed, because they are not required to participate in the unemployment tax system.
Nonprofits have options
The above applies to all Iowa employers except 501(c)(3) organizations. 501(c)(3)s do not have to pay state unemployment insurance taxes. Many Iowa 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.