WA Cares Fund Payroll Tax: Rate, Exemptions, and Benefits for 2026

Program Overview

What Is the WA Cares Fund?

The WA Cares Fund is Washington State's mandatory long-term care insurance program — the first of its kind in any U.S. state. Governor Inslee signed the Long-Term Services and Supports (LTSS) Trust Act into law in 2019, creating a payroll-funded benefit that helps working Washingtonians access long-term care without depleting their savings.

Premium collections began on July 1, 2023. Eligible workers can access benefits as of July 2026. The program fills a critical gap: Medicare and standard health insurance typically do not cover long-term care, and Medicaid only pays after a person has spent assets down to $2,000. WA Cares provides a middle path for workers who may not qualify for Medicaid but cannot afford private long-term care policies.

Senate Bill 5291, signed on May 20, 2025, introduced significant reforms effective January 1, 2026. These changes include new exemption categories, simplified vesting rules, and a re-entry pathway for workers who previously opted out with private insurance.

Who Is Covered

Who Pays the WA Cares Premium?

The WA Cares premium is paid entirely by employees. Employers do not contribute to this fund, unlike taxes such as state unemployment insurance. The premium is deducted from employee wages through standard payroll withholding each pay period.

Nearly all W-2 workers whose employment is localized in Washington are subject to the premium, including full-time, part-time, and temporary employees. The following groups are not automatically enrolled:

• Federal government employees
• Self-employed individuals (may opt in voluntarily)
• Tribal business employees (unless the tribe has opted in)

If you are covered by Washington's Paid Family and Medical Leave program, you are also subject to WA Cares premiums unless you hold an approved exemption from the Employment Security Department (ESD).

Current Rate

What Is the Current WA Cares Premium Rate?

The WA Cares premium rate is 0.58% of an employee's gross wages as of 2026. State law caps the rate at this level, meaning it cannot exceed 0.58% without a legislative change. There is no income ceiling — every dollar of wages is subject to the premium regardless of how much a worker earns. Tips are excluded from the calculation.

A 2024 actuarial analysis found that at the current 0.58% rate, the fund is projected to remain solvent through at least 2099. For most workers, total lifetime contributions will be less than the $36,500 benefit. According to the WA Cares Fund, only employees earning above roughly $210,000 per year for 30 consecutive years would contribute more than they would receive in benefits.

Exemptions

Who Is Exempt from WA Cares Premiums?

Several groups may claim voluntary exemptions from the WA Cares premium. As updated by SB 5291 for 2026, the current exemption categories are:

• Out-of-state residents — Workers with a permanent home address outside Washington
• Military spouses and domestic partners — Spouses or registered domestic partners of active-duty U.S. service members
• Veterans with service-connected disabilities — Veterans rated at 70% or higher disability by the VA; this exemption is permanent
• Active-duty military personnel — Civilian employees serving on active duty may opt out, but must re-enroll within 90 days of discharge or separation (new as of January 1, 2026)
• Nonimmigrant visa holders — Workers on temporary work visas are now automatically exempt unless they notify their employer they wish to participate (changed from opt-out to automatic exemption in 2026)

A legacy exemption existed for workers who purchased qualifying private long-term care insurance before November 1, 2021. That enrollment window is closed, but SB 5291 allows those previously exempt workers to cancel their exemption and re-enter the program before July 1, 2028. The Employment Security Department will contact eligible individuals.

Legacy private-insurance exemptions were permanent — once approved, the worker was disqualified from ever accessing WA Cares benefits. The new re-entry window under SB 5291 is the only exception to that rule.

Multi-State Rules

How Do Multi-State and Remote Workers Get Treated?

Whether you owe WA Cares premiums depends on where your work is 'localized,' not where your employer is headquartered. WA Cares applies the same localization test as Washington's Paid Family and Medical Leave program, defined under RCW 50A.05.010.

Work is considered localized in Washington if:

• The employee performs all work within Washington, or
• The employee works partly in Washington and any work performed outside the state is temporary or transitory

A remote employee living and working full-time in Washington is covered even if the employer has no physical presence in the state. Conversely, a Washington-based employer generally does not withhold WA Cares premiums for employees who work entirely in another state.

Workers who relocate out of Washington after contributing for at least three years (with 500 or more hours worked per qualifying year) may elect to keep their coverage portable. This election must be made within one year of leaving the state. Out-of-state participants who continue may access benefits starting July 2030, but once they elect to continue, they cannot later withdraw from the program.

WA Cares Premium on an $85,000 Salary

How much a full-time Washington employee earning $85,000 per year pays in WA Cares premiums.

Self-Employment

Can Self-Employed Workers Opt Into WA Cares?

Self-employed individuals are not automatically enrolled but may voluntarily opt in to earn WA Cares benefits. Eligible workers include sole proprietors, independent contractors, LLC members, and partnership or joint-venture members. Corporate officers are not classified as self-employed for this purpose.

The opt-in deadline is June 30, 2026, or within three years of first becoming self-employed, whichever is later. To enroll, create a SecureAccess Washington (SAW) account at secureaccess.wa.gov, add the Paid Family and Medical Leave service, and select the self-employed coverage election.

Self-employed participants contribute 0.58% of either their net self-employment earnings or gross wages paid from their business entity. Each calendar year in which you work at least 500 hours counts toward the contribution requirement. Hours are calculated by dividing your gross annual income by the current state minimum wage. Coverage begins the first day of the quarter following your election.

Benefits and Vesting

What Benefits Does WA Cares Provide?

The full WA Cares benefit for 2026 is $36,500 per person, adjusted annually using the Seattle-area consumer price index. This is a lifetime maximum, not an annual allowance. Benefits cover more than 40 long-term care services organized into six categories:

• Home-based care — Personal care, home-delivered meals, housework, errands
• Safety and accessibility — Home modifications, adaptive equipment, emergency response systems
• Community services — Adult day programs, transportation
• Health and wellness — Care coordination, professional nursing
• Family support — Dementia supports, caregiver respite, consultation
• Facility care — Assisted living, adult family homes, memory care, nursing homes

Three pathways exist to meet the contribution requirement:

• Permanent pathway — At least 10 total years of contributions
• Temporary pathway — At least 3 of the last 6 years at the time care is needed
• Transition pathway — Workers born before January 1, 1968, receive a pro-rated benefit equal to 10% of the full amount for each year of contributions (minimum one year required)

SB 5291 also created a framework for private insurers to offer supplemental long-term care policies that extend coverage beyond the WA Cares benefit, requiring a minimum 12-month coverage period after program benefits are exhausted. Rules for these supplemental policies took effect May 1, 2026, with policies expected to become available in 2027.

Employer Duties

What Are Employer Obligations Under WA Cares?

Employers must withhold the 0.58% WA Cares premium from every covered employee's wages each pay period. Premiums are reported and remitted to the Employment Security Department on the same quarterly schedule as Paid Family and Medical Leave contributions.

Key employer responsibilities include:

• Withholding the correct premium amount each paycheck
• Accepting and processing employee exemption approval letters from ESD
• Maintaining records of exemptions and contributions
• Remitting collected premiums to ESD quarterly
• Reimbursing employees for any premiums incorrectly withheld from exempt workers

SB 5291 introduced enhanced recordkeeping and premium reporting requirements effective in 2026. Employers who fail to withhold or remit premiums may face penalties from ESD.

This is general information, not tax advice. Consult a qualified tax professional or the Employment Security Department for guidance specific to your situation.

Official Sources

Where Can You Verify the Current WA Cares Rate?

The official source for the current WA Cares premium rate is the WA Cares Fund website at wacaresfund.wa.gov. The rates page at wacaresfund.wa.gov/rates publishes the premium rate sheet, last updated June 2026.

You can also confirm rate details and filing requirements through the Employment Security Department at esd.wa.gov. For the governing statute, refer to RCW 50B.04 under Washington state law, which establishes the Long-Term Services and Supports Trust Program and sets the 0.58% statutory rate cap.

Because rates and rules can change through legislative action, check these official sources at the start of each calendar year or when onboarding new employees in Washington.