Vigilant Blog

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Feb 03, 2022

WASHINGTON: Long-term care premium tax delayed to July 2023

Disability 

On January 27, 2022, Governor Jay Inslee signed Substitute House Bill 1732, delaying the implementation of Washington state’s long-term care premium tax from January 1, 2022, until July 1, 2023. As we previously reported, mounting opposition to the program caused Governor Inslee to announce a delay in late December 2021. However, in a subsequent press release, he acknowledged that he couldn’t stop the legally mandated tax collection; only the legislature has that power. The legislature acted quickly, passing a bill out of both houses on January 27, 2022, with the governor signing the same day. The bill immediately delays the premium assessment for 18 months and delays other key deadlines as well. The bill also allows those born before 1968 to receive partial benefits.

The governor also signed a companion bill, Substitute House Bill 1733. It allows certain workers to apply for an exemption from paying long-term care premiums: U.S. military veterans with a service-connected disability rating of at least 70 percent; spouses and registered domestic partners of active duty U.S. military service members; nonimmigrant temporary workers; and employees who work in Washington but maintain a primary residence outside of Washington.

Some provisions of the Long Term Care Act remain controversial, such as denying benefits to those who pay into the system and later move out of state, and establishing a contribution rate that raises questions about the program’s financially stability. The delay allows legislators to address these issues in the next year.

Tips: If you already started collecting long-term care premiums from employees’ paychecks, the newly signed law requires you to refund those amounts within 120 days of collection. For specific recommendations on issuing the refunds and complying with other aspects of your payroll tax withholding obligations, consult your tax adviser.

This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult legal counsel.

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