The WA State LTC Act with Tim Ripp
In July of 2019, the Long-Term Services and Supports Trust Program legislation became law, now referred to as the WA Care Fund. We are writing to you because this law will take effect this coming January 2022 and will impact your paychecks if you are a W-2 employee.
In essence, the law provides a small Long-Term Care (LTC) benefit for Washington residents. It will be funded by an uncapped and mandatory 0.58% payroll tax on all income for every W-2 employee with a few exceptions such as Federal employees and certain negotiated employer bargaining units. The program offers an initial $36,500 benefit which will be inflated annually by a rate determined by a Washington State board, based on the Consumer Price Index (CPI) in Washington. The program will adhere to strict vesting rules along with residency requirements at claim time to qualify for benefits.
We are passing this information along, as there is a window of opportunity to file for an exemption to the payroll tax and involvement in the program. The law allows for Washington employees to file for an exemption through the Employee Security Department (ESD) October 1st, 2021 through December 13st, 2022. The law also stipulates that to file for the exemption the employee must have credible LTC insurance in place prior to November 1st, 2021.
We recently conducted an interview with Timothy Ripp who is an Executive Vice President at Clifton Park, and a subject matter expert on the WA Care Fund. In our interview, Tim discusses what the new law entails and why individuals may want to opt out.
If this upcoming payroll tax has caught you by surprise and you would like to learn more about the State program and your options, now would be a great time to schedule a meeting to review your options to acquire the exemption and incorporate LTC planning into your financial plan.
Content in this material is for general information only and not intended to provide specific advice or recommendation for any individual. This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.