WA State’s Long-Term Care Tax Possibly Delayed 1 Year Before It Goes into Effect
Washington state employees may have started noticing a new tax being deducted from their paychecks, the Long-Term Care Tax (LTC). Collections for the LTC tax insurance payroll tax may be postponed until 2023.
WA State Legislature put the issue to a vote with HB 1732 on Wednesday, January 19, and the House majority decided to postpone the new employment tax, as several news outlets have reported. There were 91; nays and 6 members were absent for the vote.
You can comment on this proposed tax collection delay at the WA Senate Public Hearing on Monday, January 24, 4 p.m. when the bill SB1732 heads to the Senate Ways & Means Committee. The Committee will hold an executive session on the proposed tax delay on Tuesday, January 25.
WHAT IS THE LONG-TERM CARE TAX?
It is a tax similar to Social Security and Medicare in that it helps cover the cost of long-term care for eligible Washington state residents over the age of 65 years old. It is a lifetime insurance benefit and is considered an insurance premium.
"Beginning January 2025, each person who is eligible to receive the benefit can access services and supports costing up to $36,500 over their lifetime.
The benefit will be adjusted annually up to inflation." - WA Cares Fund
WHICH WASHINGTON STATE AGENCY WILL BE COLLECTING THE LTC TAX?
The Employment Security Department of Washington state will be collecting the tax on behalf of the Washington Cares Fund. If the LTC tax delay does not pass the Senate vote, then the agency will be collecting the tax from employers beginning in April 2022.
HOW MUCH WILL THE LONG-TERM CARE TAX BE ON OUR PAYSTUBS?
Eligible employees working in Washington state currently pay 58 cents for every $100 they earn.
WILL PAYROLL TAXES BE RETROACTIVELY REFUNDED OR SET ASIDE FOR EMPLOYEES IF THE DELAY OCCURS?
WHAT IF I AM SELF-EMPLOYED IN WASHINGTON STATE? CAN I STILL GET ACCESS TO THE LTC BENEFIT?
Eligible self-employed residents of Washington state can opt-in to the Long-Term Care Tax insurance benefit. More info is here.
FIND MORE INFORMATION ON THE LONG-TERM CARE TAX AND WA CARES FUND
Get more information here.