Washington officials: If you're hoping to avoid the state's new long-term care tax, you should apply for an exemption soon

If you’re planning to join the hundreds-of-thousands of Washington workers who have filed to opt-out of the state’s new long-term care benefit, officials at the state’s Employment Security Department (ESD) say it’s better to apply sooner than later.

The state will begin collecting the tax that funds the benefit — which is 0.58% of a worker’s total wages — on Jan. 1 of next year. If you apply for an exemption any time after that date, your wages will be garnished until the end of the quarter in which you applied, according to an ESD spokesperson. That means, if you apply for an exemption on Jan. 1, your wages will be subject to the tax until April 1 even if your application is approved.

Per state law, the department is not able to distribute refunds.

Workers have until Dec. 31 of 2022 to apply for an exemption. Employers are automatically exempt; self-employed workers are not required to pay into the benefit, but can do so if they wish. Those wishing to receive an exemption needed to have a private long-term care insurance plan by Nov. 1.

ESD data shows that 344,030 workers have applied for an exemption to date, which accounts for just under 10% of the 3.5 million workers the department estimates are subject to the tax. The department has approved 140,005 applications and marked another 1,540 as “incomplete.” In total, the department has processed 41% of the applications it’s received.

The ESD spokesperson said the number of applications they’ve received has slowed in recent days. The department received roughly 95,000 applications in the first week and averaged nearly 10,000 applications per day over the first month. The page on the WA Cares Fund website where exemption requests can be filed crashed before noon on the first day and was down for several hours.

Workers could begin applying for exemptions on Oct. 1.

The spokesperson said the department expects to be able to approve every exemption application it receives before the new year as long as the request is made before Dec. 1. That means workers hoping to avoid the tax should apply soon.

Applicants whose exemption requests are approved will receive an email that says their “exemption request status has changed,” referring to the status in a user’s WA Cares Fund profile. The department will then mail a letter to the address the user provided, notifying them of their new exemption status. Workers should give that letter to their employer, who’s responsible for remitting the tax to the state.

The new benefit, which was established by the state Legislature in 2019, is meant to provide eligible adults a total of $36,500 to be used for long-term care expenses such as delivered meals and in-home care. Those who receive an exemption are permanently barred from receiving benefits. The same is true for workers who move out of state.