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Business groups ask governor to intervene before long-term care tax takes effect

Eliseo Vera (L) speaks with his mother Esther Ortega, while they are reunited with social distance in a long-term care facility on March 22, 2021, in Los Angeles, California. (Photo by Mario Tama/Getty Images)

A coalition of 165 employers, business groups, local governments, and labor unions is urging Gov. Inslee to intervene in the state’s long-term care insurance tax before it takes effect in January.

Unless a state resident has private, long-term care insurance by the end of October, most will have to pay the tax. All W2 employees who average 12.5 hours per week will start to see the deductions for a long-term care tax as of Jan. 1. A person earning $50,000 a year will pay $290 a year in additional taxes.

The benefits also include certain limits, including that it won’t move with you if you leave Washington.

People with their own care policies can opt out, but those cost thousands of dollars a year. Those policies also need to be in place before the end of October, and insurance agents are saying you should apply soon to ensure coverage.

Private long-term care insurance all but impossible to get ahead of new state tax

The coalition of business groups, in a letter to the governor, is urging the formation of a bipartisan legislative leadership group to address the numerous concerns with the long-term care tax, and to consider pausing collection of the new payroll tax.

The Legislature established the Long-Term Services and Supports Trust (LTSST) in 2019, but there were then changes to the legislation in the last two sessions. The letter states that those changes “have created a program that is unclear, insolvent, and does not address the actual long-term care needs of all Washington state residents.”

The members of the coalition support giving Washington residents options to provide for their long-term care needs, but argue that the current program “creates obstacles rather than options.”

Read the full letter here.

‘Difference is clear’ between new state payroll, capital gains taxes

This group isn’t the first to push back against the new payroll tax.

Cary Condotta, a former state representative, had previously told the Dori Monson Show that he thinks the tax should be optional, and he’s hoping to put that to a citizen vote. Condotta is one of the backers of a citizen-led initiative to stop the tax from going into effect.

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