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Employer Guidance for Washington’s Long-Term Care Payroll Tax

Beginning on January 1, 2022, employers will be required to collect a payroll tax on employee wages for Washington State employees to fund Washington’s state-run long-term care (LTC) program, the WA Cares Fund.

In 2019, Washington State adopted the Long-Term Services and Supports (LTSS) Trust Act, making Washington the first in the nation to adopt a mandatory, public, state-run LTC insurance program. The program will be funded via payroll tax.

The WA Cares Fund is designed to provide eligible Washington residents with up to $100 per day, with a maximum lifetime limit of $36,500 (adjusted annually), to pay for approved LTC services. However, while the payroll tax begins in 2022, no benefits will be paid out until 2025. This will allow the Fund to build a reserve from which benefits can be paid. To receive benefits, eligible employees must receive a determination from the Department of Social and Health Services that they require assistance with at least three activities of daily living.

Employer Responsibilities

Employers are not required to contribute to the program. Employers are responsible for collecting and remitting the premiums via a mandatory payroll tax and submitting a quarterly report to the Washington State Employment Security Department (ESD). All private and public employers with a Washington employee must collect the new payroll tax except for the federal government and federal tribes. The payroll tax rate is 0.58%. This means that someone earning $50,000/year would pay about $290 annually ($5.58/week) in taxes. The payroll tax rate will be reassessed every other year, beginning in 2024 but is capped at 0.58%. There is no cap on the taxable salaries that are subject to this tax.

Who does this apply to?

Applicable employees work in Washington, receive wages reported on Form W-2, and work at least 500 hours per year. Employees over the age of 18 can opt-out of the program if they apply for an exemption. An employee would need to attest to having sufficient LTC insurance coverage purchased before November 1, 2021. Both individual and group policies will qualify for the employee exemption. The ESD will accept applications for this opt-out only between October 1, 2021, and December 31, 2022. Exemptions are permanent, and employees may never opt back in, even if they change jobs.


Employers do not apply for an exemption and do not apply for an exemption on behalf of their employees even if the employer offers LTC insurance. If an employee’s exemption is approved, they are responsible for notifying their employer and providing a copy of the approval letter from the ESD. Once notified, employers must not deduct WA Care premiums from their wages. Employers must retain these notifications.

For more information on how to ensure your organization remains compliant with new national and local regulations, visit OneDigital's Compliance Confidence page.