WASHINGTON STATE LONG TERM CARE TRUST ACT 2021
We would like to bring to your attention a matter that concerns all Washingtonians. In July of 2019, Washington State Legislature passed the Long Term Care Trust Act. This piece of legislature impacts all W2 adult employees in the form of a 0.58% tax on W2 income (Ie. salary, bonuses, RSU’s). If you have W2 income you will automatically be taxed unless you opt-out. To opt-out, you must have a Long Term Care (LTC) policy in place before November 2021.
There are no provisions for you to opt-out in the future. Once the tax starts, unless Washington state changes the law, you will pay. For those reading this that do not currently have a policy, there is a limited window of time to put a qualifying policy in place.
LTC policies have been a staple of our practice as there is great benefit in owning your future care. We have helped many of you obtain LTC insurance which we believe will allow you to opt-out. We do not have definitive word from the Washington State Insurance Commissioner, yet the policy issuers believe they meet the criteria. Some employers may also be offering a new Long Term Care Group Policy. Once we see their offering, we can provide additional guidance. If you have underlying health conditions, gaining LTC insurance through a group policy from a company would be one venue to gain insurance as well as the ability to opt-out of the 0.58% tax.
You can expect to receive a more thorough review of the LTC Trust Act in the coming weeks and the services we can provide should you choose to opt-out. We are your advocates and are here to help answer any questions you have. Please do not hesitate to call us or book an appointment. We know this legislation not only impacts our clients but many others so please share it with anyone to whom it applies.