Following a recent trend across the United States, New Mexico has repaid the money it borrowed from the federal government to prop up its unemployment insurance fund. The New Mexico fund now contains $377 million – a healthy balance according to state and federal officials.
“The trust fund has recovered in a way it was designed to do,”said Celina Bussey, Cabinet secretary for the state Department of Workforce Solutions according to the Santa Fe New Mexican. “We’re headed in the right direction as far as rates falling in the coming year.”
The healthy trust fund balance means that unemployment taxes can be lowered. How much an employer’s premiums will decrease depends upon their past unemployment claims history. Organizations with a history of layoffs (especially those with seasonal employees) won’t see as much of a decrease.
New Mexico has the nation’s second highest unemployment rate, beating only Alaska, at 6.6 percent.
Nonprofits have options
The above applies to all New Mexico employers except 501(c)(3) organizations. 501(c)(3)s do not have to pay state unemployment insurance taxes – high or low. Many New Mexico 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.