Trail Financial Planning, LLC is a fee-only financial planning and investment management firm located in Bellingham, WA

A shift in the wind: update on WA Long-Term Cares Act implementation

December 21, 2021
in Risk and Insurance, Tax planning
by John

A shift in the wind: update on WA Long-Term Cares Act implementation

Nearly two years ago, the Washington state Legislature passed the “Washington Cares Act,” to create the Long-Term Services and Supports Trust program (LTSS program).  The program is designed to provide some financial assistance to eligible Washington residents for long-term care costs, funded by a 0.58% payroll tax on Washington W2 wage earners.  The program (and payments) were scheduled to begin on January 1, 2022.  I wrote about the act here.  

UPDATE (on 12/17/2021):  Governor Inslee announced that the state will NOT begin collecting the payroll tax in January 2022.  The collection will be paused until at least April 2022, after the 2022 legislative session.  According to Governor Inslee, “The legislature has the opportunity to delay the Cares Fund premium assessment this year in order to make improvements to the Fund during the 2022 legislative session and we fully intend to do so.”  I would try to translate this for you, but that would imply that I know what is going on in the minds of the plan architects.  I do not.   

What does this mean for employees?

  • If you did not have an alternate Long-Term Care (LTC) insurance plan in place to request an exemption from the LTSS program, and you are a W2 earner, you should not have any tax withheld from your Jan., Feb. or March 2022 paychecks
  • If you DO have an exemption in place, you must continue to pay the premiums to that plan in order to have the plan remaining in place

What does this mean for employers?

  • Employers will not be required to start withholding any payroll taxes for the WA LTSS program in January 2022
  • There will not be any penalties or interest owed associated with not collecting these payroll taxes
  • Until further notice, the collection of premiums and the implementation of the WA LTSS is on hold

Why did this change happen at the 9th hour, only two weeks before the program was set to be implemented?

Good question

Stay tuned folks, and hold on to your hats, handbags and wallets.  It’s blustery out there!

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John Chesbrough

John is a financial planner and investment manager. He, along with his business partner Elizabeth Snyder, founded, a fee-only, independent financial advisory firm called Trail Financial Planning (Trail FP) in Bellingham, WA. John and Liz enjoy working with people who care for others and their community – parents, firefighters, therapists, doctors, nurses, and teachers. They work with people by appointment. To learn more, or to schedule some time with John or Liz directly, please visit www.trailfp.com.