The passing of the Washington Cares Long-Term Care Insurance requirement creates many requirements for payroll companies, employers, and employees. Currently, this only impacts those located in the state of Washington, but it’s possible that additional states may pass and implement similar requirements in the future.

Here’s a brief summary of what the requirement entails:

• The rate is 0.58% of gross income with no limits, and only the employee contributes
• If an employer withheld an incorrect amount, this action creates the assumption that they opted to pay the tax on behalf of the employee
• Employees were required to secure private long-term care insurance policies by November 1, 2021, to claim an exemption for WA Cares
  • Exemptions: Employers must maintain proof of employee exemptions from the applicable agency. Without such proof in hand, an employer must withhold on behalf of the employee
  • Exemption applications are still ongoing for those who meet the following criteria:
    • Reside outside of Washington
    • Spouse or registered domestic partner of an active-duty service member of the U.S. Armed Forces
    • In possession of a non-immigrant work visa
    • Veteran with a 70% service-connected disability rating or higher
  • Some workers are automatically excluded: federal employees, employees of tribes, and self-employed individuals. However, employees of tribes and self-employed people can opt in
• All employee dates of birth must be included in the file uploaded quarterly, remitted with the WAFML returns
• If an employee has an exemption, this must be noted on the WACARES file
• No paper returns, filing, or payments will be accepted

For more information about the WA Cares Fund, visit the website.

This article is informational and does not constitute legal or financial advice. Consult with an employment lawyer or accountant for additional clarification on how these changes impact your company.