Alert! Long-term care payroll tax exemption now available

Dear Neighbor,

Some of you may remember receiving a newsletter from me earlier this summer regarding the newly formed WA CARES Fund and the payroll tax that comes with it. For more information on this new program, I invite you to read my previous newsletter here.

As a follow-up, I want to provide more information on exemptions and the implementation timeline for this new payroll tax. Starting today, October 1, 2021, individuals who purchased private long-term care insurance now have the option to opt-out of the WA CARES Fund and can apply for an exemption here. The Washington State Employment Security Department will only accept these applications through December 31, 2022. However, if you are a Washington state worker (either publicly or privately employed) and receive a W-2 and have not opted out of this tax by December 31 of this year (2021), you will pay up to $0.58 per $100 of earnings beginning in January 2022.  Unfortunately, this only allows for a very small window of time to apply for an exemption. Additionally, individuals will not be eligible to receive benefits from this fund until 2025. For those individuals seeking private insurance, I am afraid it is almost impossible to find at this point.

Like I said in my previous newsletter, I did not support this legislation when it came before me in 2019. Because of this reason and many others, several of my Washington State Senate colleagues and I wrote a bipartisan letter to the governor asking for him to suspend this law and do away with this tax altogether. This is a burdensome tax on top of all the other state and federal taxes workers already pay. The maximum benefit an individual can receive from this fund is $36,500 – which doesn’t go very far. Unfortunately, I do not hold out much hope that the governor will suspend this law or that we will see any tax relief anytime soon.

If you would like more information regarding the WA CARES Fund, check out their website. As always, you can also reach out to my office with any questions or concerns on this issue or any other topic.