Prepare for 2025: Tax Savings Options for the Maine Association of Nonprofits Members

All employers, including nonprofits, are required to fund unemployment benefits but did you know that the Federal Unemployment Tax Act (FUTA) of 1972 allows 501c3 organizations to opt out of paying state unemployment taxes to become “reimbursable employers?” When an organization operates in this way, it reimburses the state dollar-for-dollar for only the unemployment benefits paid out to former employees as they occur, rather than subsidizing for-profit entities when paying into the state unemployment tax system.

“An organization that is exempt from income tax under section 501(c)(3) of the Internal Revenue Code is also exempt from FUTA.”

With many states raising tax rates on unemployment funds that dwindled during the worldwide Pandemic of 2020, nonprofits could be paying as much as $2 in unemployment taxes for every $1 their former employees make in claims.

A dedicated and long-time partner of the Maine Association of Nonprofits, UST Workforce Solutions has been able to help our participating members exercise this exclusive nonprofit tax alternative and lower their unemployment costs—saving our members thousands annually. For organizations with stable employment, these savings have proven to be significant—often resulting in a 60% reduction in unemployment expenses.

Just last year alone, UST helped your participating Maine Association of Nonprofits peers save $248,961.46 on their unemployment claims costs… money better served supporting local communities.

We are proud to partner with UST as they offer specialized cost-saving programs designed to help you build a solid financial foundation. Their comprehensive suite of services includes expert HR tools, claims management services, dedicated hearings representation, streamlined e-filing, and their highly acclaimed outplacement services. UST can guide you through the process of becoming a reimbursing employer and accessing substantial savings—but time is running out to exercise your tax exemption status for 2025. 

To find out how much you could save in 2025, submit the no-obligation Unemployment Savings Analysis today and be sure to use priority code 2024MANP-UI to expedite the process.