Washington Long-Term Services and Supports (LTSS) Tax

Per the state of WA, the  LTSS tax is currently paused until 2023; we are awaiting details from the agency regarding the timeline of when this tax will become effective.

In 2019, WA established a long-term care insurance benefit for all eligible Washington residents. This program is funded by worker contributions into a trust fund, the WA Cares Fund. This tax is effective January 1, 2022  under the Washington Cares Fund. 

Important Note:

In late December 2021, WA Legislature and the Governor announced plans to change or postpone the Cares Fund during the legislative session scheduled for March of 2022. Per the WA Governor, the Employment Security Department (ESD) will not collect premiums for this tax from employers until the WA ESD  outlines when in 2023 this tax will become effective. Per the governor, employers will not be subject to penalties and interest for not withholding this tax from employee wages during this transition while this legislation is still being considered.
At this time, Zenefits is not currently managing this tax until WA legislation is confirmed and we have clear direction on how this tax is to be supported going forward.  

More detailed information about this tax can be found on the Washington State Department of Social and Health Services website, or visit the WA Cares Fund website regarding the pending legislation.

Setup and Calculation

  • The WA LTSS  tax will be managed via the Washington Employment Security Department.
  • All Washington employees who work in Washington, receive wages reported on a Form W-2, and work at least 500 hours per year, are subject to this tax. Wages earned in Washington are subject to the tax. This applies to residents and non-residents of Washington. 
  • Per the WA Cares Fund, though this is an employee paid tax, ERs will have the option to cover this premium cost on behalf of their employees, in which case employees will not be withheld on their paychecks. 
  • This tax has an exemption option for employees. Employees must apply for an exemption directly, and the employer cannot opt out employees.
  • LTSS tax is calculated at a rate of 0 .58% premium assessment (for example, $ 0 .58 premium assessment on every $100 of eligible wages). 
  • There is no wage base for this tax and employers will remit quarterly. Tips are not subject to this tax.

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