Washington State Adopts New Payroll Tax for Long-Term Care Trust Program
Posted on 05/27/2021
The State of Washington formed the first state-run long-term care (LTC) services and support trust program in the U.S.
Washington State Governor Jay Inslee inked SB 1323 (Long-Term Care Trust Act), which amends RCW 50B.04 to provide that, beginning January 1, 2022, Washington employers must withhold a new 0.58% payroll tax from all employee wages. There is no cap on the amount. Payments are due quarterly to Washington state. In general, all Washington employees must pay the new tax. Money will be deducted from employee’s paychecks. For example, a household with income of US$ 100,000 will pay about US$ 580 per year.
Covered employees have an opportunity to receive an exemption from paying the new payroll tax if they attest to having sufficient LTC insurance purchased before November 1, 2021. The Washington’s Employment Security Department (ESD) will accept applications for this exemption only between October 1, 2021, and December 31, 2022.
In order to qualify for benefits, an employee must have paid into the system for 10 years.