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How Do I Create Long Term Care in Basic Payroll

Updated

As of 1/20/2022 the WA state legislature delayed collecting the LTC until July 1, 2023. Any amounts collected from employees paychecks will need to be refunded the the employees. Please follow the steps to reverse amount amounts collected and remove the rate from the deduction (The steps are outlined below.

Go to:  Payroll >Payroll Setup > Benefits & Deduction Plans tab

  1. Find the Long Term Care Deduction
  2. Click on the plan and click Edit from the top menu
  3. Change the Employee Decimal to 0.00
  4. Click the Update Employee List
  5. Click Save

After changing the settings for the Deduction Plans, on the next payroll, be sure to add back the amount taken out of the employee's paychecks so far this year.

According the the Employment Security Department, employers have 120 day to refund the amounts back to the employees. For more information visit the Employment Security Department website.

When the Washington State Long Term Care comes back into play in July of 2023:

Starting July, 2023, Washington State will begin collecting funding for the new Long Term Care Act.  This is administered by the Employment Security Department.  The employee paid premium will be a percentage of wages starting on July 1, 2023.  This Long Term Care deduction is to start on the first July 2023 payroll regardless of when the hours were worked.

The percentage is 0.58%.   Currently, we do not have any information if there is a maximum withholding amount per year.

There is no employer contribution, but employers are required to collect premiums through employee payroll deductions and remit proceeds to the Employment Security Department (EDS). This agency will deposit funds in a trust for the individual until they qualify for the benefit.

All qualifying employees are subject to the premium assessment, with the following exceptions:

  • Individuals who have private long-term care insurance may opt-out: Any employee who attests that they have comparable long-term care insurance purchased before November 1, 2021, may apply to ESD for an exemption from the premium assessment. The employee must provide proof of their ESD exemption to their employer before the employer can waive collecting the premium assessment from the employee’s wages. The employee must apply for the opt-out exemption to ESD between October 1, 2021, through December 31, 2022.
  • There may be additional employees who are exempted.

For more information visit the Employment Security Department website.

The latest information from the Employment Security Department is Long Term Care is going to be reported along with PFMLA. It is recommended that the Long Term Care has the same vendor as PFMLA.

It is recommended to wait to add Long Term Care or change Long Term Care rates for the new year until after the last payroll of the current year is complete.

Go to:  Payroll >Payroll Setup > Benefits & Deduction Plans tab

Click Add Plan  

  1. Enter Plan Number- This is the sequence they appear on the screen. If left blank, the program will add the number automatically
  2. Enter the Type - Other
  3. Plan Name - Long Term Care or Wa State Long Term Care
  4. Double click the Vendor - select the same vendor used for PFML or PFMLA
  5. Make sure the Employee: Soc Sec  Medicare FWT  and W2 match what's shown below
  6. Participate: Choose Yes. This is an employee only deduction.  
  7. Under the Employee: fields, enter .0058 for the decimal. This is the deduction for all employees.
  8. Click Add New on the right hand side to add employees to the deduction plan.
  9. Double click employee name field to add an employee to the deduction.
  10. Once all the employees have been added, click the Save button above the employees.
  11. Click the Save button on the Plans side.  

The Long Term Care deduction should be in each employee's Benefits and Deductions section of their employee record. If you've already started a payroll period, please check the payroll benefits for each employee and add the Long Term Care deduction if needed. Be sure to check the deductions next payroll period to make sure the deduction is working as expected.

The Long Term Care deduction will be reported quarterly along with PFMLA. When running the benefit reports for regular payroll, uncheck Long Term Care from the list. See How Do I Create Long Term Care Reports? (The Create Long Term Care Reports help information will be available when information becomes available from the WA State Employment Security Department on how to report the Long Term Care deduction.

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