[US] How to reimburse employees for Washington Cares premiums

The Washington Cares Fund premium assessment (WA Cares premium) is an employee paid tax which came into effect January, 2022. In February, the state retroactively delayed the WA Cares premium to begin July, 2023. This means employees who paid this tax are entitled to a reimbursement. Read on for further details, and instructions on providing this reimbursement in Wave Payroll.

Changes to the WA Cares premium

On Thursday, January 27, 2022, the WA State Governor signed bills House Bills 1732 and 1733, to delay the WA Cares premium tax to July 2023.

Wave stopped calculating and applying deductions as of February 1, 2022.

The Washington Employment Security Department (ESD) has issued guidance on previously collected premiums. See their website for more details on their guidance.

How to find the reimbursable amount per employee

Wave has updated 2022 Wage and Tax Reports to ensure that your records in Wave reflect the updated start date for employers to collect Washington Cares premiums as outlined above.

If your Wage & Tax Report included Washington Cares premiums calculated before February 1, Wave notified you of the regulatory change by email. In March you were also emailed a record of the Washington Cares premiums adjusted to match the delayed start date. Keep this email for your records.

Remember to reimburse your employees for their withheld premiums as outlined below.

How to reimburse active employees through Wave

Add the required premium reimbursement to each employee’s pay to maintain a record of the reimbursement. The premium must be returned to employees within 120 days from the date that the premiums were collected. To ensure that wages and taxes aren’t affected by the addition of the reimbursement, follow these steps:

  1. Head to Payroll > Employees.
  2. Click on the employee’s name to open their profile.
  3. Open Benefits & Deductions from the employee profile menu.
  4. Select Add to Pay > Expense Reimbursement.
  5. On the pay stub label, enter Washington Cares premium 2022 reimbursement.
  6. Set the Recurrence as only once.
  7. Click Save.

Exemptions

An employee may have opted out of the WA Cares premium if they qualified as exempt. Once an exemption is approved, employees are not able to opt back in to the tax. This means that exemptions approved prior to the delay of the WA Cares premium will still be considered effective when it comes into effect July, 2023.

As an employer, you are required to keep the employee exemption approval letter on file.