OLYMPIA, Wash. — Four years after it was passed, the Washington Cares Fund is officially launching.
The program aims to make long-term care available to people across Washington state, with eligible people eventually able to access a $36,500 benefit.
Beginning July 1, employers in Washington state will start deducting premiums from paychecks for the WA Cares Fund.
But how much will it cost you?
THE QUESTION
In an email to our VERIFY team, Noah wrote, “My boss said my pay will be lower next month because of a new tax. Is this true?"
THE SOURCES
Ben Veghte, Director of the Washington Cares Fund
THE ANSWER
Yes, most Washington workers will see a deduction in their paychecks starting in July because of a new payroll tax that will go to the Washington Cares Fund.
In 2019, lawmakers passed legislation that created the fund - a state-run Long Term Care insurance program. Washington taxpayers who have contributed to the fund for 10 years can receive a $36,500 lifetime benefit to help pay for long-term care needs.
The program is funded by a payroll tax, which goes into effect on July 1st.
"It works just like Medicare or Social Security, you pay in a little bit of every paycheck over your career," Veghte said.
Workers in Washington, who do not have an exemption, will pay a tax of 0.58% of their wages.
"The typical worker is going to pay about $12 a paycheck, or $24 a month, into WA Cares. That's somebody [who] makes about $50,000 a year," Veghte explained. "If you make more than that, you pay in more. If you make less, you're paying less, because it's a percentage of your wages."
Most employees in Washington will be required to pay the payroll tax. However, exemptions include:
Federal employees who work in Washington
Employees of tribal businesses in which the tribe has not opted in
People who are self-employed who have not opted in
Retired and non-working Washingtonians
Other Exemptions
There are some other limited exemptions available, but workers will need to apply for them. This includes anyone who lives out of state but commutes into Washington for work.
"The new types of Exemptions are for types of workers who might have had to pay in, but maybe that wouldn't have been able to plausibly have a path to be able to claim benefits," Veghte said.
Exemptions include:
- Live outside of Washington
- Are the spouse or registered domestic partner of an active-duty service member of the United States armed forces
- Have a non-immigrant work visa.
- Are a veteran with a 70% service-connected disability rating or higher
It’s important to note the exemptions are not automatic. So, if you think you are eligible for one, you need to apply as soon as you can. Otherwise, the money will be taken out of your paycheck and you likely will not be able to reclaim it.
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