Bill Proposes Delaying WA Cares Payroll Tax Collection To 2023

OLYMPIA, WA — The Washington Cares Fund payroll tax could end up delayed into next year, depending on the results of a new bill put forth by several top state Democrats.

The 0.58 percent payroll tax had initially been set to take effect on Jan. 1, 2022, but was delayed in mid-December, when Gov. Jay Inslee and other legislators announced a pause in its implementation to make further tweaks.

Now, that pause could swell into a much longer delay, if the legislature approves House Bill 1732. As The Seattle Times first reported, HB 1732 is sponsored by House Majority Leader Pat Sullivan (D-Covington) and Rep. Frank Chopp (D-Seattle), and would postpone the tax to July 1, 2023, and refund any taxes collected before that date.

According to supporters, the delay is necessary to work out kinks in the WA Cares program, reconsider who qualifies for its benefits, and include all workers born before 1968.

The Washington Cares Fund is a first-of-its-kind program that would provide up to $36,500 for eligible Washingtonians, including seniors, disabled people and those battling serious illnesses. The funds can be used to help pay for things like assisted living, at-home care and other long-term needs. As HB 1732, notes, implementing the tax and distributing those funds will require collaboration between the state's Employment Security Department, the Health Care Authority, the Department of Social and Health Services, and the Office of the State Actuary, which, the bill argues, need more time to develop the systems necessary to maintain the fund.

HB 1732 would also allow the estimated 150,000 employees who work in Washington but live in other states — who are ineligible to receive the WA Cares funds — to opt out of the payroll tax, plus military spouses, and some veterans.

The extended delay is not totally unexpected: Even before Inslee first delayed the tax into 2022, there had been some concerns that the tax was not ready for implementation, with legislative leaders sending a letter to Inslee asking him to delay the tax for another year, allowing state lawmakers to make those extra tweaks. Gov. Inslee apparently agreed that the tax needed more work, releasing a statement reading, in part:

"This bill will help provide much-needed care and coverage for Washingtonians as they age. However, legislators have identified some areas that need adjustments and I agree. We need to give legislators the opportunity to make refinements to the bill."