Do you work and receive a W-2 form from your employer? If your answer is yes, be prepared for an “income tax” on your paycheck beginning Jan. 1, 2022.
In 2019, the Democratic-led Washington Legislature and the Democratic governor signed the Long-Term Services and Supports Trust Act, renamed the “WA Cares Fund.” Changes are still being made by the Department of Social and Health Services.
The new “income tax” is 58 cents per $100 earned and with no cap on the amount of wages earned. It is designed to provide eligible residents with up to $100 per day, with a maximum lifetime limit of $36,500 (adjusted for inflation), to pay for long-term care services including professional care at home or nursing facilities care.
Employees can apply for an exemption to the “income tax” if they are over the age of 18 and attest that they have long-term care insurance purchased before Nov. 1, 2021. Individuals must apply for an exemption through the Employment Security Department, which will only accept applications from Oct. 1, 2021, through Dec. 31, 2022.
A question still remains whether the program is preempted by the Employee Retirement Income Security Act. There will be lawsuits pending soon since the Washington Constitution does not allow an income tax.