Long Term Care Payroll Tax Exemption

As you may know, the Washington State Legislature established the Long-Term Services and Supports Trust, also known as the Washington Cares Fund. This will be funded through a 0.58 percent premium assessment on all employees’ wages beginning January 1, 2022. Employers will be required to collect this premium through payroll withholding and will remit those premiums to the WA Employment Securities Department as part of their quarterly reporting.  For more details, see this link from the Washington State Department of Social and Health Services.

There is a provision for employees to opt out of this program and thus not pay this tax. Employees will have a window of time from October 1, 2021 through December 31, 2022 to attest to the Employment Security Department (ESD) that they have purchased long term care insurance.  This insurance policy must be purchased by November 1, 2021 to qualify for exemption from the premium assessment. See this link for details on this exemption.

We recently inquired of the ESD to provide specific steps on how employees apply for this exemption. Below is copy of their reply that we think will be helpful to pass on to your employees:

 
Thank you for reaching out to WA Cares with your inquiry.
 
The Employment Security Department has adopted rules regarding application requirements for exemption.

• The rules indicate that individuals must attest that their long-term care insurance policy meets the definition of “long-term care insurance” in RCW 48.83.020. The department may verify the existence of private long-term care insurance purchased before 11/1/2021. Please be sure to keep this information available if you are asked for it.
• You will need to provide us proof of identity documentation when you apply.

Applications will be available online starting October 1, 2021 through December 31, 2022. You will submit your application to the Employment Security Department via your SAW account. A SAW account is a secure access program that will allow you to submit your application for the WA Cares Exemption.

ESD will have staff dedicated to processing exemption applications and issuing approval letters.  Individuals will apply online and upload proof of identification.  The time required to process complete exemption applications is minimal. Our staff will process applications as we receive them.
 
Best Regards,
Customer Care Team 
Paid Family and Medical Leave | WA Cares Fund
paidleave.wa.gov | wacaresfund.wa.gov
(833) 717-2273
 

We encourage you to inform your employees of the Washington Care Fund and required payroll tax, especially those employees that want to file for the exemption.
 
If you have questions after reading through these resources, please contact our office or email us at info@battershellnichols.com.  
 

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