Washington State’s Long-Term Care Trust Act will provide long-term care services to those who pay into the program and need assistance with daily activities. This will be funded with a payroll tax of .58% starting January 1, 2022.
Some residents will be exempt from the tax, including 1099 employees, part-time workers, those who are self-employed and business owners.
“It’s solely W-2 payroll workers, so regular employees are subject to the taxes,” said David Donhoff, founder and senior advisor of Leverage Planners Wealth Management. “It’s mandatory.”
The state program will provide, starting in 2025, the same benefit for everyone paying into the program.
“The people that really get the best benefits are those that pay very little in taxes, which is to say the people that make very little income get the best deal from the state,” Donhoff said.
Donhoff says that many people could get better benefits outside of the state program and pay less money. For those who make $75,000 or more or plan to at some point in their careers, it’s likely better to get a private policy now to get exempt from the payroll tax.
There is a one-time deadline exemption of Nov. 1, 2021. If you have a qualifying, private long-term care policy in place by this Nov. 1 and leave it in place for the state’s review period, you can be permanently exempted from the state payroll tax.
To find out if you could get better coverage for a lower cost, visit the Leverage Planners website. You can request to talk via phone or chat to learn more about your options.
Sponsored by Leverage Planners. Segment Producer Suzie Wiley. Watch New Day Northwest 11 AM weekdays on KING 5 and streaming live on KING5.com. Contact New Day.