Learn about the new unemployment insurance rule for Vermont nonprofits
We want to alert Vermont employers about a new compliance change related to nonprofit organizations and unemployment insurance. The Vermont General Assembly has introduced new unemployment insurance (UI) laws for nonprofit organizations. Effective July 1, 2024, Vermont will require all nonprofit organizations to participate in providing unemployment insurance coverage. Under this new legislation, nonprofits must report their wages quarterly, keep track of new hires, and pay for any eligible unemployment claims that result from employee separations.
Nonprofits have two choices when it comes to participating in Vermont's unemployment insurance system:
- Taxable Entities: Nonprofits choosing this option will be assigned a 1% tax rate as a "new employer," effective July 1, 2024.
- Reimbursable Employers: Nonprofits choosing this option will not pay State or Federal unemployment taxes and are exempt from quarterly state contributions/taxes. However, they must fully repay the State for any eligible unemployment claims paid related to individuals previously employed by their organization during the employee's "base period," which is roughly the 18 months prior to their claim.
How to update Vermont unemployment selections in QuickBooks:
Vermont nonprofit employers that need to update their Vermont Unemployment rate in QuickBooks effective July 1, 2024, can follow our help article to add the 1% rate effective 07/01/2024.
Vermont employers that have marked employees exempt will need to uncheck their exempt status by reversing the steps to exempt employees outlined in our help article. Don't remove the employee exemption status until after running the final second-quarter payroll (the second quarter ends June 30, 2024). The article will also walk you through the steps needed to be treated as a "reimbursable" employer for businesses that choose that option.
We will communicate to QuickBooks Vermont payroll customers in April and then again in June, reminding nonprofits to update their Vermont unemployment rates and exemptions. If you are a Vermont nonprofit, we recommend adding a reminder to take this action after running your final payroll in June.
For more information on this agency compliance change, visit the agency website.
