Washington State Long-Term Care Payroll Tax
June 3, 2025
WA Cares Fund: What You Need to Know
Washington was the first state to implement a mandatory long-term care payroll tax, known as the WA Cares Fund 
. The program aims to reduce pressure on the state’s Medicaid system by creating a limited public benefit for workers who require long-term care.
Since July 1, 2023, all W-2 employees in Washington have been subject to a 0.58% payroll tax, deducted directly from their paychecks. Employers are required to withhold and remit these contributions, though they are not required to contribute themselves.
Protect Your Income from the WA Cares Tax
Private long-term care insurance puts you in control of your care, your costs, and your future.
Key Program Details
How Much Is the Tax?
There is no income cap. All wages, including bonuses, stock options, PTO, and severance, are taxed.
Examples:
- $75,000 salary → $435/year
- $300,000 salary → $1,740/year
When Do Benefits Begin?
January 1, 2026
To qualify, individuals must be Washington residents and meet eligibility rules (see below).
What Are the Benefits?
- Up to $100 per day for qualified care.
- Lifetime maximum of $36,500.
- Must need help with 3 or more Activities of Daily Living (ADLs).
- Care may include in-home services, adult day care, or facility-based care.
📉 Note: In 2025, average nursing home costs in Washington exceed $142,000/year. In-home care is over $93,000/year, making the WA Cares benefit inadequate for full coverage.
Source: Nationwide Financial 2025 Cost of Care Survey 
conducted by HVS, site accessed 08/04/2025
Who Pays the Tax?
Employees
You are subject to the tax if:
- Your work is localized in Washington; or
- Your work is controlled from Washington and partially performed there
This definition mirrors that used for Washington’s Paid Family and Medical Leave program.
Self-Employed Workers
Self-employed individuals are exempt by default but may opt in voluntarily.
To receive future benefits:
- You must opt in by January 1, 2025, or
- Within three years of becoming self-employed
Who Is Eligible for WA Cares Benefits?
To receive benefits starting in 2026, you must:
- Be a Washington resident
- Need assistance with 3+ ADLs
- Have contributed for:
- 10 years total, with no break longer than 5 years, or
- 3 of the past 6 years before applying
- Work at least 500 hours per year during eligible years
⚠️ If you plan to retire within 10 years or move out of state, you may never qualify for benefits—despite paying into the system.
Exemptions from the WA Cares Fund
You may qualify for a permanent exemption if you:
- Live outside Washington
- Are the spouse or domestic partner of an active-duty U.S. military member
- Have a non-immigrant work visa
- Are a veteran with a 70%+ service-connected disability
Exemption requests must be filed with the Washington State Employment Security Department (ESD).
Learn how to apply for an exemption 
What If You Move Out of State?
WA Cares benefits are only available to current Washington residents.
If you retire elsewhere or maintain dual residency, your eligibility may be affected. Be sure your permanent residence is clearly established.
Do You Need Private Long-Term Care Insurance?
WA Cares provides only basic coverage and may not meet your full care needs—especially if you plan to move out of state or want more control over your care options. Private long-term care insurance offers greater protection, flexibility, and peace of mind:
✔ Covers higher care costs
✔ Portable across states
✔ Provides peace of mind for you and your family
Compare Your Options >
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Private Long-Term Care Insurance in Washington State >
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Last updated: June 03, 2025
Written by: Craig Matesky, President, ACACIA Insurance
Reviewed by: Mike Berger, National Sales Manager