Lawsuit filed against Washington’s new long-term care tax

Lawsuit filed against Washington’s new LTC tax — A lawsuit was filed in federal court challenging Washington’s new long-term care payroll tax that goes into effects on January 1, 2022. The lawsuit seeks to stop the January implementation of the 0.58% payroll tax which is an employee paid tax.

The class-action lawsuit was filed by three businesses and six individuals. The lawsuit outlines the many problems with the new program including a federal law banning states from requiring workers to join a plan providing sickness or medical benefits.

They also note the treatment of people living outside Washington but working here, who are required to pay into the program but aren’t eligible to receive benefits unless they move to Washington. A couple of other issues raised include people that pay in to the program but move out of state after retirement and people currently working but who will retire within 10 years, so they wouldn’t receive their benefits.

Washington State Attorney General Bob Ferguson has received a cease and desist letter from the State of Idaho, demanding Washington state not collect the tax from Idaho residents who work in Washington.

On another front, Reform Washington co-founder former State Rep. Cary Condotta is gathering signatures for Initiative 1436 which would make the long-term care program and tax optional, rather than automatic and mandatory. I-1436 is an initiative the Legislature which means they have until December 30, 2021, to deliver the 324,516 signatures (it is recommended that a sponsor submit at least 405,0000 signature  to allowing for invalid signature) from registered voters needed for it to be submitted to the 2022 Legislature.

Want to know what you would pay in the WA Cares Fund? Use the Seattle Times’ new online calculator to estimates your lifetime contributions.

AGC was opposed to this bill when it first passed the Legislature in 2019 and was opposed to the changes that were made during the 2021 session. For more information, contact AGC’s Michele Willms.

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