Washington Governor Delays Long-Term Care Insurance Payroll Tax
Washington Governor Jay Inslee has announced a delay collecting the payroll tax associated with the Washington long-term care (LTC) insurance program until April 2022. Prior to the delay, employers were set to begin withholding employee contributions of 0.58% of a covered employee’s wages on January 1, 2022 (there are no employer contributions) [Office of the Governor, News Release, 12-17-21].
Gov. Inslee ordered the Washington Employment Security Department (ESD) not to collect the premiums from the LTC insurance program – called the WA Cares Fund – before they come due in April. Gov. Inslee and legislative leaders explained that time is needed to pass additional legislation to make refinements to the LTC insurance program.
On the WA Cares Fund website, there is an update box to explain that the governor and state legislature have announced plans to change and improve the WA Cares Fund during the 2022 legislative session, which is set to end in March. The ESD will not collect premiums from employers until April (when the first quarterly payments are due) or until further direction is received.
A potential issue for employers could arise if the legislation is not enacted by the April due date for the first quarterly payment. If employers have not been withholding contributions from employee paychecks beginning in January, employers could then be forced to withhold larger amounts from fewer paychecks to remit the total amount due by the deadline, unless it is further delayed by the governor.
Lia Coniglio, Esq., is Managing Editor of PayState Update and Senior Manager of State Payroll Information Resources for the APA.