Washington Long Term Care (LTC) Services and Supports Act – payroll tax for WA workers delayed until July 2023

Background: Washington state passed the Long-Term Care Services and Supports act in 2019. This bill quickly became known as the “LTC payroll tax law” as it requires WA workers to pay a tax of 0.58% on W-2 payroll amounts to fund LTC benefit payments.  Employers do not pay the tax; it is funded by the employees via a payroll tax.

The payroll tax was originally effective January 1, 2022. However, after the WA governor announced the postponement of the tax, WA legislators quickly moved to enact legislation which formally delayed the long-term care tax until July 2023.

What should an employer do if the tax was already collected from an employee’s paycheck? The legislation requires an employer to refund premiums collected within 120 days of the collection date.

Summary:

The WA LTC payroll tax has been delayed to July 2023 giving time for legislators to review the bill in its current form and perhaps pass companion legislation to improve upon a few problem areas.

For more information regarding the tax, visit http://www.wacaresfund.wa.gov/.  Bolton published a blog on this topic here which you can review for more details.

 

While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept  liability  for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting or other professional advice or services. Readers should always seek professional advice before entering into any commitments.


About Michelle Cammayo

Michelle Cammayo has more than 13 years of Employee Benefits experience specializing in all lines of health and welfare benefits. Today, Michelle works closely with clients and partners to provide guidance in areas of the law including ERISA, HIPAA, COBRA, FMLA and PPACA. She also oversees the Compliance Department at Bolton & Company to ensure we are helping our clients manage and eliminate risk with regards to employee benefit compliance.

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