Seyfarth Synopsis: Although Washington State Governor, Jay Inslee, has announced a moratorium on the State’s collection of the Washington Cares Fund long term care (“LTC”) payroll tax from employers without penalty, last Thursday he backtracked somewhat, saying that he does not have the authority to allow employers not to collect the tax from employees, leaving employers wondering whether to collect the tax or not.
The Washington Cares Fund was originally set to begin collecting taxes in January 2022 to help pay for the LTC expenses of the State’s residents. For more information on Inslee’s announced moratorium on collecting the payroll tax from employers, see our blog post here.
After making this announcement, however, last Thursday Inslee cautioned employers that only the Legislature can delay the implementation of the payroll tax. He also added that although he believes that the Legislature will delay the tax when they return from recess next month, if for some reason this does not happen, employers will be responsible for making up the difference. Apparently, Inslee is now urging employers to collect the tax and hold it until additional guidance is issued by the Legislature.
Interestingly, the Legislators who announced the moratorium with him have urged employers not to collect the tax.
While it is anticipated that the Legislature will postpone the tax next month, unless and until that occurs, Washington State has muddled an already muddled law. Stay tuned for more developments….
We will continue to monitor and alert you of developments regarding the LTC Act. In the interim, please contact the author of this blog post or the benefits lawyer you work with for additional information.