Since last year, we’ve worked to keep readers updated about changes to the WA Cares Fund, the state’s upcoming new long-term care benefit program. While there haven’t been many changes since the Legislature delayed the implementation
of the payroll tax until July 2023, there are a few important deadlines for cities to remember, namely around exemptions from the payroll tax.
You may remember 2021’s fierce scramble by employees looking to find alternative long-term care insurance in order to qualify for an exemption from the program and corresponding payroll tax. For those able to find alternative insurance, the deadline
to apply for an exemption is at the end of the year on December 31, 2022. Many employees that did obtain alternative insurance have already applied for exemptions, however those who qualify for an exemption and have not yet applied have a limited
window to do so or they will be subject to the long-term care payroll tax starting July 2023.
As a reminder, earlier this year the Legislature added several new categories for who could qualify for limited or temporary
exemptions to the payroll tax. However, most workers will need to go by the original rules that limited exemptions. To qualify for a permanent exemption from the payroll tax (and the WA Cares Fund program), workers need to:
- Be at least 18 years old;
- Have already obtained alternative long-term care insurance before November 1, 2021; and
- Submit an application for an exemption to the Employment Security Department by December 31, 2022. Employees can find the exemption application here.
Once an application is approved, ESD will send an approval letter to the employee. The employee can then present a copy of the letter to their employer who must then stop withholding long-term care payroll tax premiums. Employees will need to present
the letter to any subsequent employers to avoid mistakenly paying long-term care payroll taxes. Employers (and the state) are not obligated to refund premiums already paid if the employee failed to show their exemption letter.
After December 31, the only exemptions available will be for the new exemption categories the Legislature passed in the 2022 legislative session. Those exempted categories include:
- Veteran of the U.S. military who has been rated by the U.S. Department of Veterans Affairs as having a service-connected disability of at least 70%;
- Spouses or registered domestic partners of active-duty U.S. military;
- People working under a non-immigrant temporary worker visa and employed by a Washington employer; or
- People employed by a Washington employer but have a permanent address and primary residence out of state.