MYNORTHWEST NEWS

Long-term care tax could still be taken out of paychecks despite delay from Gov. Inslee

Dec 22, 2021, 12:06 PM | Updated: Jan 1, 2022, 6:19 am

Long term care tax...

(Getty Images)

(Getty Images)

Gov. Jay Inslee announced last week that he would be delaying the implementation of a controversial long-term care tax in Washington state. Despite that, the tax still could be deducted from people’s paychecks starting in January without further action from the state Legislature.

Gov. Inslee delays controversial long-term care tax

That was pointed out by Republican leaders, who sent out a joint press release noting that in some scenarios, “the tax will be collected as originally planned.”

“The governor’s announcement changed nothing,” the statement reads. “The only thing it did was publicly acknowledge that the program is a mess.”

Under the tax, all W2 employees who average 12.5 hours per week were initially set to see the deductions for the tax as of Jan. 1, 2022. A person earning $50,000 a year would pay $290 a year in additional taxes. Washingtonians could opt out of the tax, but that was contingent on having a separate private long-term care insurance policy in place by Nov. 1.

Inslee’s delay doesn’t explicitly prevent employers from deducting the tax from paychecks, with his office clarifying that he “does not have the power to change this legal requirement on his own.” As a workaround, he has instead instructed the state’s Employment Security Department “not to accept quarterly payments from all employers to give the legislature time to work on modifications to the program.”

That means it will be up to individual employers to forgo collecting the tax from paychecks, with Inslee and lawmakers promising that “there will be no penalties or interest” while lawmakers work on the bill as part of the 2022 legislative session.

“The only way to prevent collections from being legally required in January would be to change the underlying law before then,” a spokesperson with Inslee’s office told MyNorthwest.

To that end, Republican leaders are pushing for a special legislative session before the end of the year.

“We need to go into a special session before the state begins collecting the tax and repeal this bill – even if it’s over the holidays, using virtual technology to meet on short notice,” they proposed. “Under the current law, it is legally questionable if anyone who has the money deducted from their paycheck won’t receive it back – not even if they are granted an exemption.”

State senator proposes bill to repeal Washington’s long-term care tax

Taxes collected under the bill — known more formally as the WA Cares Fund — would be used to provide long-term care services and support worth up to $36,500 over a single Washingtonian’s lifetime.

“WA Cares Fund is a benefit you earn like Social Security that covers care in your home or a facility, as well as home modifications, meal delivery, car rides, and caregiver training,” the fund’s website reads.

While the state’s Republican lawmakers have expressed a desire to repeal the tax entirely, others in the Legislature have highlighted how the fund will still help provide crucial resources, arguing that its larger issues revolve around modifying its implementation.

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Long-term care tax could still be taken out of paychecks despite delay from Gov. Inslee