Seyfarth Synopsis: As a reminder to companies with workers in Washington State, payroll tax withholding under the Washington State Long Term Care Act will begin on July 1, 2023, unless an employee qualifies for an exemption. Companies with employees in Washington will need to be ready to withhold the payroll tax and keep track of employees who are exempt from withholding.
A Quick Refresher on the Washington Cares Fund
Established under the Washington State Long Term Care Act, the Washington Cares Fund is a program that gives working Washingtonians access to long-term care coverage. Washington Cares is self-funded by worker contributions and investment earnings on those contributions. Employees in Washington who do not receive an exemption can earn a maximum of $36,500 in lifetime long-term care insurance coverage (adjusted annually for inflation) by contributing 0.58% of their wages in premiums during their working years. For more information on the Washington State Long Term Care Act, please see our blog posts here, here and here, and our Legal Update here.
Next Steps
Employers in Washington State may want to remind employees that the payroll tax withholding will begin in July and that if they want to apply for an exemption that they should do so as soon as possible. Washington Cares Fund premium payments are deducted from an employee’s paycheck until the exemption is approved, becomes effective and is provided by the employee to the employer. Exemptions become effective the quarter following approval by the State and pursuant to the law, refunds for previous contributions are not permitted.
