Should I opt out of WA long-term care tax?

Should I opt out of WA long-term care tax?

The ideal employee for opting out of the WA Cares Fund is actually the same person who might want to consider LTCi in the first place for planning purposes. Higher earners with more income and assets to protect are going to see the best value from opting out because the payroll tax is uncapped.

Can I opt out of Washington long-term care?

Can Employees Opt Out of the Program? Yes, an employee may opt out of the Program and its taxes and benefits if: The employee is 18 years old or older on the date he or she applies for the exemption, and. The employee attests that he or she has other long-term care insurance.

What is the Washington state long-term care Trust Act?

“The Long Term Care Trust Act, which passed the state legislature at the end of April and will be signed into law by Governor Jay Inslee on Monday, establishes the country’s first social-insurance program to pay for long-term care. All residents will pay 58 cents on every $100 of income into the state’s trust.

How much is WA LTC tax?

The Act imposes a payroll tax on Washington workers of $0.58 for every $100 (0.58 percent) of their gross wages. Employers are required to withhold the tax and contribute the funds to a trust to fund long-term care benefits.

How can I avoid long-term care tax in Washington state?

How can you avoid the WA Cares Fund payroll taxes? An employee has a one-time opportunity to opt-out if they have comparable private long-term care insurance. An employee who attests they purchased long-term care insurance before November 1, 2021, may apply for an exemption from the premium assessment.

Who should opt out of wa cares?

You are 18 years of age or older. You have long-term care insurance in place by November 1st, 2021. You wish to opt out of the WA Cares Fund (and corresponding payroll tax) You understand that if your exemption is approved you can never participate in the WA Cares Fund or get program benefits.

Can I opt out of wa Cares Fund in 2022?

Workers who live out of state and work in Washington, military spouses, workers on non-immigrant visas, and certain veterans with disabilities will be able to opt out of the program if they choose. Workers will begin contributing to the fund in July 2023. Employers will refund any premiums collected in 2022 so far.

Is Washington cares act legal?

Washington Governor Clarifies That Employers Are Still ‘Legally Obligated’ to Pay Premiums Under the Washington Cares Act.

Who is exempt from WA cares act?

To qualify for an exemption, you must be at least 18 years old and have proof of an eligible LTC policy. To apply, navigate to the WA Cares Fund website and select “Apply for an Exemption.” You do not need a copy of your policy to file the exemption.

Is wa Cares fund legal?

The WA Cares Fund is a mandatory long-term care insurance benefit established by Washington state law in 2019. Starting July 1, 2026, benefits can be used to purchase long-term care services which may include professional care, equipment, home safety evaluations, and/or compensation for family members who provide care.

What is the wa Cares fund?

The WA Cares Fund is an affordable long-term care insurance program for all working Washingtonians. It offers choice. WA Cares empowers us to control how and where we receive long-term care. It provides peace of mind.

Who has to pay WA long-term care tax?

The tax is 58 cents per $100 earned for anyone who works in Washington state. When it was initially passed, the tax was mandatory. A deadline came and went for those to file for an exemption, meaning they would have to pay for their own private plan before the law went into place.