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Set up Washington Cares Fund payroll tax

by Intuit•6• Updated 1 month ago

Learn about the new WA Cares Fund long-term care insurance benefit and how it impacts you and your employees.

Effective July 1, 2023, you’re required to start collecting employee premiums. The Long-Term Services and Supports Trust Program helps provide long-term care insurance to Washington employees. 

The WA Cares Fund tax rate is 0.58% for employees. There isn’t an employer premium under the law.

Choose your option to set up WA Cares Fund

Note: Not sure which payroll service you have? Here's how to find your payroll service.

My employees will pay the premium

We’ll automatically set up your company with the 0.58% tax rate to calculate the employee deduction starting July 1, 2023. You don’t need to do anything else.

Contact us for help to add the 0.58% tax rate to your employees.

The WA Cares Fund Tax was originally released in payroll update 22201 (Dec. 2021). You’ll need to change the existing tax to begin calculations starting July 1, 2023.  

  1. Download and install payroll update 22312 released on June 15, 2023.
  2. Go to Lists, then Payroll Item List. 
  3. Select the WA - Cares Fund item.
  4. On the Company Rate screen select 0.58% from the dropdown menu.
  5. Select Next twice, then Finish.

My business will pay the premiums on behalf of our employees

  1. Go to Settings ⚙, and select Payroll Settings.
  2. From Washington tax, select Edit ✎.
  3. From Washington Cares Fund, select Edit. 
  4. From the WA Cares Fund dropdown ▼, choose Employee: 0%, Employer: .58%. Enter the Effective Date. 
  5. Select OK.

You’ll need to create a reimbursement item and reimburse your employees each payroll.

Step 1: Create a reimbursement item
  1. Go to Lists, and select Payroll Item List.
  2. Select New Payroll Item.
  3. Select Custom Setup, then Next.
  4. Select Addition, then Next.
  5. Enter the name of the Reimbursement item (e.g. WA Cares Fund - Employer). Select Next.
  6. Select an expense account for tracking this item.
  7. Set the Tax Tracking type to None. 
  8. Select Next twice.
  9. From Calculate Based on quantity, select None. Select Next.
  10. Choose to calculate on Gross. Select Next.
  11. Enter the desired company-paid contribution rate (the max is 0.58%). 
  12. From Limit Type, select Annual - Restart each year. 
  13. Select Finish.
Step 2: Add the reimbursement item to your employees
  1. Go to Employees, then select Employee Center.
  2. Double-click your employee's name.
  3. Go to the Payroll Info tab.
  4. From Additions, Deductions, and Company Contributions, add the reimbursement item.
  5. Repeat steps 2-4 for each employee. 

My business or employee has an exemption waiver from WA Cares Fund

If your business or any of your employees were approved for an exemption from WA Cares coverage, you can exempt your employees.

  1. Go to Payroll, then select Employees (Take me there).
  2. Select your employee.
  3. From Tax withholding, select Edit.
  4. From Exemptions, select Edit.
  5. Select WA Cares.
  6. Select Save.
  7. Repeat steps 2-6 for each exempt employee.

Contact us for help to exempt your employees from WA Cares coverage.

The tax rate on the WA Cares Payroll Item is already 0%.  You don’t need to make any changes to the item. 

Remove the tax from your employees

  1. Go to Employees, then select Employee Center.
  2. Double-click your employee.
  3. Select Payroll Info.
  4. Select Taxes.
  5. Select Other.
  6. Highlight the WA Cares Fund tax, then select Delete.
  7. Select OK.
  8. Repeat steps 2-7 for each exempt employee. 

Apply for an exemption

Employer: The agency isn’t accepting applications for exemptions from employers who wish to purchase a private insurance plan.

Employees: Certain employees in Washington who aren’t expected to use their WA Cares benefits in the future may be eligible for exemptions.

Beginning Jan. 1, 2023, Washington workers can be eligible for exemptions from WA Cares if they:

  • Live outside of Washington.
  • Are the spouse or registered domestic partner of an active-duty service member of the United States armed forces.
  • Have non-immigrant work visas.
  • Are veterans with a 70% service-connected disability rating or higher.

ESD will process all WA Cares Fund exemption applications sent in by June 1, 2023, before premiums take effect in July. For more information, visit wacares.wa.gov/exemptions.

What to Expect:

ESD will review the application and notify your employee. 

If the application is approved

Your employee will get an exemption approval letter from ESD, and will be: 

  • Removed from the program with no option to re-enroll. 
  • Disqualified from accessing WA Cares benefits in their lifetime. 
  • Required to give the exemption approval letter to all current and future employers. If you don’t, employers will withhold non-refundable WA Cares premiums. 

Exemptions will take effect the quarter after your application is approved.

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