Non-Profits & Colorado Unemployment

While non-profits and other not-for-profit organizations may be exempt from the Federal Unemployment Tax Act (FUTA), 501(c)3 organizations in Colorado may still be liable for the state unemployment insurance (UI) tax premiums once they have employed 4 or more workers during 20 different weeks of a calendar year.  Thus, if you are operating a small non-profit and have not paid into the State UI program, this does not prevent you from becoming liable for premiums and reporting in the future.  

If you have questions about how this may apply to your organization, please contact us and ask to speak with one of our tax managers.  Or you may reach out to the liability unit at the CDLE at CDLE_employer_services@state.co.us, (303) 318-9100 (Denver-metro area), 1(800) 480-8299 (outside Denver-metro area).

Excerpt from Colorado Department of Labor & Employment FAQs: "Who must pay unemployment insurance premiums?"

A: You may be required to pay unemployment insurance premiums if you meet one or more of the following requirements: 

• Are a religious, educational, or charitable nonprofit organization who meets the description in the federal Internal Revenue Code (IRC) 501 (c)(3) and employed four or more employees for some portion of a day in each of 20 different weeks during a calendar year. You are required to pay UI premiums even if you are exempt from federal unemployment premiums under the Federal Unemployment Tax Act (FUTA) 3306 (c)(8).
• Paid wages of $1,500 or more in a calendar quarter during the current or preceding calendar year.
• Employed at least one person for some portion of a day in each of 20 different weeks during the current or preceding calendar year.
• Employed at least one person for some portion of a day in each of 20 different weeks during the current or preceding calendar year. 
• Employed domestic help in a private home and paid cash wages of $1,000 or more to one or more workers in any calendar quarter. This provision applies also to local college clubs and/or local chapters of a college fraternity or sorority. 
• Either paid cash wages of $20,000 or more to one or more agricultural workers in a calendar quarter or employed ten or more agricultural workers for some portion of a day in each of 20 different weeks during a calendar year. 
• Are an agricultural crew leader. You are considered an agricultural crew leader if you: Furnish workers to perform farm labor for another person. Pay, either on your behalf or on behalf of another person, the workers you furnish for farm labor. Have not made a written agreement with another person under which the farm workers are designated as employees of that person. 
• Are subject to FUTA
• Acquired all of a Colorado trade, business, organization, or a substantial portion of the assets from a predecessor employer who is liable to pay unemployment insurance premiums. 
• Acquired a part of a trade, business, or organization of an employer that, if considered separately, would be an employer as defined by CESA. 
• Are a state agency, state-operated hospital or school of higher education, or a political subdivision of the state.
• Voluntarily elected to participate in the Unemployment Insurance and your voluntary election is approved.