New long-term care income tax begins in 2022

Washington citizens will soon see less money in their monthly paychecks unless they opt-out of mandatory long-term care insurance foisted upon them by Democrats in Olympia.

No, this is not hyperbole. Not one House Republican voted for the legislation that passed in 2019 and goes into effect in January of 2022.

Beginning Jan. 1, 2022, workers in Washington State will pay $0.58 per $100 of their earnings to fund the Long-Term Services and Supports Trust Program. Those who pay into the trust program are eligible for a lifetime maximum benefit of $36,500, which is adjusted annually by no more than the Consumer Price Index. This maximum benefit could be used up with just a few weeks' worth's of long-term care services, making this plan have a very low return on potentially high investment.

Can workers opt-out?

Workers in Washington State age 18 years or older have a short window in 2021 to permanently opt-out of the trust program and its payroll tax.

To opt-out, an individual must purchase a qualified long-term care insurance plan before Nov. 1, 2021. A qualifying long-term care insurance plan must meet the definition of long-term care insurance in RCW 48.83.020.

Once a plan is purchased, an individual must apply for an exemption from the program to the Employment Security Department (ESD) between Oct. 1, 2021, and Dec. 31, 2022. If ESD accepts the application, the individual is permanently exempt from the payroll tax and ineligible for future coverage from the trust program.

Once approved, individuals must provide all current and future employers with notice of the exemption to maintain exemption from the payroll tax.