The Utah Department of Workforce Services has announced a one-third decrease unemployment insurance taxes for most of the state’s employers. Seventy-three percent of organizations are expected to qualify for the minimum unemployment insurance contribution rate of 0.2 percent — or $64 per employee per year. The rest of the state’s employers should see a per-employee reduction of 12 percent in 2016.
“Utah’s strong job growth and low unemployment rate have fueled a healthy fund, which translates into lower tax rates for employers,” Gov. Gary Herbert said in a written statement. “The reduction is another indicator that Utah’s economy is strong as we enter 2016.”
The Utah Unemployment Compensation Fund pays benefits to workers who become unemployed through no fault of their own. During the Great Recession in 2008, the trust fund balance quickly fell to a low of $253 million. Now with a national and state-wide recovery underway the fund has recovered to a balance of $881 million.
The Utah unemployment rate was only 3.5 percent in October (well below the national average). Eight of the state’s ten industry groups have added jobs over the past year. Year-over-year job growth is reported to be 3.6 percent, with 47,700 jobs added over the previous 12 months.
The above applies to all Utah employers except 501(c)(3) organizations. 501(c)(3)s do not have to pay state unemployment insurance taxes. Many Utah nonprofits could save as much as 30 percent more 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.
