The unemployment insurance program is operated on general insurance principles wherein the employer pays the contributions (taxes) into the Utah Unemployment Compensation Fund (trust fund) to sustain the program. Governmental units, Indian Tribal units, and nonprofit organizations have the option to: (1) pay contributions into the fund based upon payroll wages in the same manner as other employers, or (2) elect to become reimbursable employers which are liable for direct reimbursement to the trust fund for benefits paid to individuals formerly in their employ in lieu of quarterly contributions. (See the Nonprofit and Governmental Employers Handbook.)
The term nonprofit organization refers only to organizations exempt from income tax as described in Section 501(c)(3) of the Internal Revenue Code. These are organizations operated exclusively for religious, charitable or educational purposes. This Department requires a copy of the Internal Revenue Service letter of exemption, 501(c)(3), in order to be recognized as a nonprofit organization and to elect to become a reimbursable employer. (See item 3 page 3.)