Enacted in 2019, the Long-Term Services and Supports (LTSS) Trust program, also known as the WA Cares Fund, was created to provide a maximum lifetime benefit of up to $36,500 for approved long-term care services and supports to those who are eligible and who have been assessed as needing assistance with at least three activities of daily living. The program is to be funded by a .58 percent premium assessment on employee wages and was originally set to become effective on Jan. 1, 2022. However, due to legislation passed in 2022, the LTSS Trust program withholding was delayed until July 1, 2023. This means that beginning July 1, employers will be responsible for withholding a 0.58 percent payroll tax from all employee wages and remitting those payments to the state quarterly. The Employee Security Department (ESD) is integrating the LTSS reporting into the Paid Family and Medical Leave (PFML) reporting system, so employers will only need to report once for both programs.

Does the LTSS Program Apply to Me?

Most individuals who receive a W-2 are subject to the new tax, even some self-employed individuals such as S Corporation owners, unless they have opted out of the program and received an exemption from ESD. The “Self-employed Individuals” section of this article contains more specifics on who falls into this category and how the LTSS program impacts self-employed individuals.

If an employee has opted out of the program, they must provide a notification of exemption to their employer; the only acceptable notification is a copy of the employee’s approved exemption letter from ESD. Once notified, an employer may no longer deduct premiums from the employee. In addition, a copy of the employee’s approved exemption letter must be kept on file.

When determining whether an organization must withhold premiums, organizations should determine whether they are a sole proprietor, a joint venturer or member of a partnership, a member of a limited liability company (LLC), an independent contractor, or otherwise in business for themselves. Generally speaking, if premiums are not assessed for the PFML program, they will not be assessed for WA Cares Fund.

Self-employed Individuals

Those who are self-employed may choose to opt into the program but are not required to withhold and remit premiums. According to the LTSS WA Cares website, self-employed refers to:

• A sole proprietor
• A joint venturer or a member of a partnership
• A member of an LLC
• An independent contractor (as described in RCW 50A.05.010 (8)(b))
• Otherwise in business for yourself

Please note that you are NOT considered self-employed if you are a corporate officer or own a corporation. If you fall under this category, you are required to withhold premiums and report yourself as well as your employees to the state’s PFML reporting system. 

Additional Resources

Please visit wacaresfund.wa.gov/learn-more for more information about the program, including educational webinars for employers and employees. Additionally, ESD has created content for employers that includes a paycheck insert as well as a pre-written staff email explaining LTSS program benefits. 

ESD will also host a webinar from 12-1 PM on May 18 titled "WA Cares Basics: What Workers Need to Know.” The webinar will cover who contributes to the fund, who may still apply for an exemption, how workers meet contribution requirements, what benefits will be available, and what employers can do to prepare. Registration for the webinar can be found here.

Questions?

For questions on the LTSS program, please contact WA Cares at wacaresfund.wa.gov/contact-us.