Staff members employed by churches in Washington State will be subject to a new tax designed to provide for long term care for those needing paid assistance for critical tasks for daily living, according to Northwest Baptist Convention business manager Pamela Brock.
The first in the nation to institute such a tax, Washington State has dubbed the initiative the Long-Term Services and Supports Trust Act. Beginning January 1, 2022, all those employed in Washington State will be taxed .58 percent of wages, including church pastors and employees. The bill was signed into law by Governor Jay Inslee in 2019, with working Washingtonians to begin paying premiums in January 2022.
Benefits for qualified beneficiaries can begin in 2025, with contributions ceasing upon retirement, according to the Washington State Department of Social and Health Services. While the tax is mandatory for all working Washingtonians, to receive the benefit you must have contributed for at least ten years without a break of five or more years; or three of the past six years and have a need for assistance with activities of daily living. A minimum of 500 hours must be worked during the stated years. Even though the tax is mandatory, those with retirement planned before the required years of taxation is complete must still participate without the opportunity to withdraw the funds.
The benefit is not mobile for those who choose to leave Washington State after paying into the system.
Each person is entitled to a lifetime benefit of $36,500 to pay for long-term services and supports. By reducing the burden on the state’s Medicaid system, the Long-Term Services and Supports Trust Act is being implemented to save taxpayers $3.7 billion by 2052. Washington employers, including churches, are required to collect premiums through employee payroll deductions and remit proceeds to the Employment Security Department (EDS). This agency will deposit funds into a trust for the individual until they qualify for the benefit.
Taxpayers may opt out of contributions if they have an accepted long-term care policy. Any employee who attests that they have comparable long-term care insurance purchased before November 1, 2021, may apply to ESD for an exemption from the premium assessment. The employee must provide proof of their ESD exemption to their employer before the employer can waive collecting the premium assessment from the employee’s wages. The employee must apply for the opt-out exemption to ESD between October 1, 2021, through December 31, 2022.
You may purchase a new private policy before Nov. 1, 2021 to opt out of the Washington State tax. If you do, you can still participate in WA Cares Fund or — if you’ve purchased a qualifying plan — you can apply for an exemption from the public benefit. If you apply and are approved for an exemption, you’ll be permanently disqualified from WA Cares, which means you may never re-enroll and you’ll be prohibited from getting WA Cares benefits, even if a need arises.
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