Puget Sound Business Journal: Your Only Chance to opt Out of Washington's New Long-Term Care Tax is Fast Approaching
Washington state’s Long-Term Care Trust Act is set to take effect at the beginning of 2022, and the only time to opt out of the new tax is fast approaching.
The Long-Term Care Trust Act was signed into law in May 2019. It is a 0.58% payroll tax, meaning, for an individual making $100,000, $580 per year will be deducted. These dollars will help fund long-term care of the individual paying the tax. There is no maximum on what can be collected.
It’s the first tax of its kind in the United States, so Brian Lockett, vice president of Comprehensive Wealth Management, says he expects there to be changes to it in the future. However, the way the law is written, there is a one-time chance to opt out of the tax.
In order to do so, individuals need to have a private long-term care insurance policy in place by Nov. 1.
They then have until the end of 2022 to submit their policy — which, again, must be dated before Nov. 1, 2021 — to the state and have it be approved as a substitute for the tax.
“Some people, it doesn’t make sense to opt out,” said Lockett. “Other people, let’s say you’re in an upward trajectory career or you have a lot of time left, or you might not live in the state of Washington later on, it probably makes sense to take advantage of this one-time opportunity to opt out of this program.”
Lockett said the underwriting process for a private policy like this one can take a couple of months.
Read the the complete interview in the Puget Sound Business Journal.
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