Washington’s New Payroll Deduction

At a Glance 

• Washington has established a new payroll deduction of 0.58% from employees’ wages for astate run long-term care insurance program. 
• The payroll deductions will go in effect on January 1, 2022.
• Individuals are eligible to claim for the benefit beginning January 1, 2025.

Please review the information below to learn more about the employer requirements for this new payroll deduction. 

Introduction 

Washington recently enacted legislation to establish a new payroll deduction effective January 1, 2022 for a state-run long-term care insurance program. The employees will fund the new program through a payroll deduction; however, employees enrolled in existing private long-term care insurance have an option to exempt themselves from this requirement. Self-employed individuals may elect to participate for this program on an optional basis. 

Employer Requirements 

Beginning January 1, 2022, through December 31, 2023, employers will withhold 0.58% of an employee’s wages and remit the premiums to the Washington Employment Security Department. The Department of Employment Security will determine the premium on a biannual basis at the rate not greater than 0.58%. This will become effective January 1, 2024.  

Employee Eligibility 

Beginning January 1, 2025, individuals are eligible for the long-term care benefit if they are 18 years of age and if they have either one of the following conditions met: 

• An individual has paid premiums for at least three years within the last six months; or
• An individual has paid the premiums for a total of ten years, with at least five hundred hours within the eligibility-determining year.

Once an individual becomes eligible for the benefit, they are entitled up to $100 a day for up to a maximum of 365 days over the course of an individual’s lifetime. 

How to Prepare and Next Steps 

Paylocity will continue to monitor this new change and provide additional details when updates are made available. In the meantime, for additional information of this benefit program, see the legislative statue here. 

Thank you for choosing Paylocity as your payroll tax and HR and payroll solutions partner. 

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.