Reminder: Washington’s long-term care payroll tax withholding begins July 1

Starting July 1, 2023, most Washington employees will be subject to a payroll tax (0.58% on all wages) to fund WA Cares, a state-run long-term care insurance program. Employers are responsible for withholding the payroll tax from employees’ wages and submitting payment and reports quarterly to the WA Employment Security Department via the Paid Leave reporting system. Benefits under the program become available to eligible state residents beginning July 1, 2026.¹

Employers should consider communicating to employees about the WA Cares Fund, including information about the payroll deductions and available exemptions. They should also prepare to withhold the employee payroll deductions starting July 1 and have a process in place to:

• Collect exemption approval letters from employees
• Cease payroll contributions for any employee who provides an exemption approval letter
• Receive notices from employees who no longer qualify for an exemption
• Restart payroll contributions when notified that an employee no longer qualifies for an exemption
• Retain copies of any exemption approval letters they receive

Footnote

¹ For more information on the WA Cares Fund, see “Washington’s new long-term care payroll tax,” Insider, June 2021, and “Washington delays long-term care payroll tax,” Insider, February 2022.