LTSS/WA Cares Deductions Effective July 1 – Exemption Approval Lag
ESD is currently processing a high volume of exemption applications and may not be able to address all applications before you are required to begin withholding premiums for the July 10, 2023 pay date.
Approved exemptions from workers who submitted their applications before July 1 will have an effective exemption date of July 1, 2023, regardless of when their application is approved. In some cases, this may mean you will be deducting premiums from workers' wages before they are able to provide you a copy of their exemption approval letter. Once they provide their exemption approval letter, deductions will need to be reimbursed to employees. ESD will not assess premiums for these workers for any part of Q3.
Reimbursing Deductions
Agencies are strongly encouraged to reimburse the deductions in the pay period following the receipt of the exemption letter from the employee by entering the exemption in HRMS on the employee’s Other Taxes – US (0235) infotype record. Refer to the Other Taxes – US user procedures for more information. Then, retain a copy of the employee’s ESD exemption approval letter in the employee’s payroll file.
Reimbursement Procedure
If the employee provided late notification of their ESD approved exemption, we are recommending agencies retroactively date the Other Taxes – US (0235) record to capture the beginning of the current quarter, resulting in a refund of the employee premiums.
For example, the employee’s exemption effective date is July 1, 2023, and you receive a copy of the employee’s ESD exemption approval letter on August 31, 2023, then enter the retroactive exemption using the day after the last check date the premium was to process. In this example, you would refund premiums for the July 10th paycheck, so the Other Taxes US record should have a start date of June 27, 2023. This will refund the employee the premium amounts withheld during the current quarter.
Available Resources
The following resources are available for you:
Employer Long Term Services and Supports FAQ – This document answers many questions about who is liable for premiums, ESD approved exemptions, on-boarding and off-boarding guidance, accounting of premiums, etc.
Employer LTSS & PFML IT0235 Decision Matrix – Use this decision matrix to help determine whether employees require an Other Taxes – US (0235) infotype record and which exempt status should be used. This also includes localization rules and ESD’s localization flow chart. Since the localization rules are the same for LTSS and PFML, you can use the matrix to confirm your IT0235 records are accurate for PFML tax types as well.
Appointment Change Action (PY) – Transfer Different Agency
New Hire Action (PY) – Create New Hire Action
Rehire Action (PY) – Create Rehire Action
Separation Action (PY) – Create Separation Action
PA30_IT0235_LTSS-WACaresFund_EE_Exemption_Tax_Type_113 Winshuttle script – Use this spreadsheet if you have 30 or more records that need to be created on the Other Taxes – US (0235) infotype due to ESD approved exemptions, employee’s whose work is non-localized, or individuals you’ve identified are not liable for LTSS premiums. This script will exempt employees from tax type 113 – WA Cares Fund LTC Tax – EE. If using Winshuttle, do not include an employee who already has an active Other Taxes US record. Employees with an active record must be manually updated.
