Nevada employers’ state unemployment expenses are expected to drop in 2018 after the state unemployment program pays off its final debt incurred during the last recession. The tax rate is expected to remain the same, at an average of 1.95 percent next year. However the surcharge of .68 percent that the state added to the tax rate to pay off bonds purchased when the unemployment insurance trust fund went insolvent during the recession is expected to be dropped in December of 2017. Payment of those bonds is being issued six months ahead of schedule.
Renee Olson, administrator of the state Employment Security Division, said the goal of maintaining the average state unemployment tax rate at 1.95 percent is to restore the trust fund to an appropriate level of solvency. The fund is now nearly $1 billion, a significant milestone but still below the target, she said.
That unemployment insurance rate drop is expected to come in December of 2017 when the Employment Security Division pays off the last of the $592 million raised by selling bonds to pay off the federal loans Nevada had to take to get through the last recession. Nevada’s unemployment insurance trust fund, like many other states, had run out of money during a period of high unemployment. Once those bonds are paid off, the overall rate Nevada businesses must pay for unemployment insurance will drop slightly to an average of 1.95 percent.
The actual rates paid by employers varies based on a risk assessment. Employers with a history of high layoffs pay more than employers who rarely layoff workers. There are 18 rate classes ranging from 0.25 percent to 5.4 percent in Nevada.
Nonprofits have options
The above tax rates, high or low, apply to all Nevada employers except 501(c)(3) organizations. 501(c)(3)s do not have to pay state unemployment insurance taxes. Many Nevada nonprofits could save as much as 30 percent 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 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.