Be ready!
WA Cares payroll deductions begin July 1, 2023
We are sharing information from the Employment Security Department's latest e-newsletter.
Beginning July 1, 2023, you must collect WA Cares premiums from your employees’ wages and report their wages and hours at the end of each quarter—much like you do now for Paid Family Medical Leave. Reporting will begin Oct. 1, 2023, and will follow the same reporting process as Paid Leave.
NOTE: There is no employer share of WA Cares Fund premiums.
However, it is the employer's responsibility to start deductions. They cannot be collected retroactively from later paychecks! Under-collecting may result in the employer having to make up the difference during quarterly reporting.
For more info about your responsibilities as an employer, as well as resources you can use to communicate with employees and answer questions about the program, click the green button to go to the WA Cares website.
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LLC owners need not participate
We'd like to address a point that affects many of The Business Guides' clients. If your business structure is a sole proprietorship or a Washington-registered LLC (or PLLC), you are not required to participate in the WA Cares Fund (although you may opt in if desired).
Member-owners of an LLC are considered to be "self employed" for purposes of this new payroll tax, and therefore exempt from participation.
But if you have employees besides yourself, they are required to be part of this program.
Your WA business structure is what qualifies you as a self-employed individual. Even if you have made an election with the IRS to be TAXED as a, S-corporation and run payroll for yourself, you are not a shareholder of a corporation in the eyes of the state (only the IRS).
Owners of Washington-registered for-profit corporations are, of course, required to participate in the WA Cares Fund.
You may wish to offer your payroll provider a copy of your LLC registration with the state, and send them this link (the WA Cares requirements are the same as for PFML):
https://paidleave.wa.gov/question/my-business-is-an-llc-b-corp-or-c-s-corp-am-i-exempt-from-paid-family-and-medical-leave/
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Calculating premiums
Calculate the total premium amount for each of your employees. The premium is 0.58% of an employee’s gross wages, so: Gross wages x .0058 = total premium for employee.
Note that unlike Paid Leave, premium contributions are not capped at the taxable maximum for social security. Need help determining premium amounts for WA Cares and Paid Leave? Check out the premium calculator at paidleave.wa.gov/estimate-your-paid-leave-payments.
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Current exemptions
Exemptions for workers who have private insurance policies are no longer available, but four new types of exemptions for the WA Cares Fund are available on an ongoing basis. These new exemptions include conditional exemptions for workers who are a spouse/registered domestic partner of an active-duty U.S. armed forces member, work in Washington but live out of state, or have a temporary non-immigrant visa (including H-2A and H-1B visas).
It’s the employee’s responsibility to apply and – if approved – to notify you (their employer) and provide you with a copy of their approval letter from ESD. These exemptions are only valid as long as workers continue to meet the exemption criteria, and if they no longer qualify they must notify their employer and ESD within 90 days.
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 HOLIDAY CLOSURE:
Our office will be closed
July 3rd & 4th
for Independence Day
Enjoy your 4th! |
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