Unemployment tax increase: What you need to know now
Did you know employers in Hawaii on average, will go from paying $90 to $630 per employee in unemployment costs this year? Because of the strain on state unemployment funds, the taxable wage base used to calculate unemployment taxes paid to the state has risen from $13,000 last year to $34,900 this year.
Specifically, under a recent House Bill, the average unemployment cost per employee for the next few years will be:
- 2010 -- $630
- 2011 -- $970
- 2012 -- $1,560
- 2013 -- $1,600
- 2014 -- $920
What can you do? – All nonprofits have the right to take advantage of a federal law allowing them to opt out of the state unemployment tax system and only pay when they have an unemployment claim. Although this law has been in place since 1970, never has it been more imperative for nonprofits to exercise this option.
When? – Hawaii allows nonprofits to opt out of the state tax system annually on Dec. 1.
How? – The Hawaii Alliance for Nonprofit Organizations has partnered with Unemployment Services Trust to help members safely get out of the state unemployment system. UST is a nonprofit trust founded nearly 30 years ago to help other nonprofits to:
- Build a reserve of funds with stop-loss protection
- Continually monitor claims
- Provide hearings and HR support
- Save up to 50 percent on their tax rate
As one UST member put it, “We joined the Unemployment Services Trust about 10 years ago because we compared the state tax rate to UST’s rate. Overall, we have saved a total of $103,253.”
Where can you find out more?
- Join a free webinar especially for HANO members, “Avoid the Hawai’i Tax Increase – Stop Overpaying on Unemployment Costs,” from 11 a.m. to noon, Wednesday, Oct. 13. To register, visit www.chooseUST.org/EVENTS and click on the link for Oct. 13.
- You can also visit www.chooseUST.org or call Bill Downey, (888) 249-4788, ext. 1156, to find out if you qualify for this program – 501(c)(3) charitable organizations with 10 or more employees are the best fit.
Act now!
To take advantage of UST for 2011, you must enroll by Nov. 30.
