WA Cares Tax Exemption: Who Qualifies and How to Apply

Washington’s WA Cares Fund grants a conditional tax exemption to four narrow groups of workers: veterans with a service-connected disability rating of 70 percent or higher, spouses and registered domestic partners of active-duty military members, people who live outside Washington but commute in for work, and holders of certain non-immigrant visas. As of January 1, 2026, H-1B and L-1 visa holders are automatically exempt and no longer need to apply.¹ Everyone else in the four groups still files through the Employment Security Department. Before you opt out of the 0.58 percent payroll premium, know that an approved exemption is permanent and disqualifies you from ever collecting the benefit, which is worth up to $36,500 starting in July 2026.²

Who Qualifies

RCW 50B.04.085 requires ESD to grant a conditional exemption to any employee who fits one of four categories.³

Veterans rated 70 percent or higher for a service-connected disability by the VA. The statute calls this conditional, but nothing triggers its expiration as long as your rating stays at that level.
Spouses or registered domestic partners of active-duty service members. The exemption ends when the service member leaves active duty, or when the marriage or partnership ends.
Workers whose primary residence is outside Washington. If you live in Oregon, Idaho, or another state and cross the border for work, you can opt out. Moving to Washington ends the exemption.
Non-immigrant visa holders in the H-1B and L-1 categories. Since January 1, 2026, this group is exempt by default; a worker who wants to stay in must tell the employer in writing. Gaining permanent residency ends the exemption.¹

The visa-holder change is the biggest recent shift. Before 2026 these workers filed the same application as everyone else; now the default is reversed.

The Private Insurance Exemption Is Closed

Washington briefly offered a separate exemption for workers who bought private long-term care insurance before November 1, 2021. The application window ran October 1, 2021 through December 31, 2022 and has not reopened.¹ If you missed it, private coverage alone is not a path to opt out today.

If you did receive that exemption and want to reverse it, you can rescind it between January 1, 2026 and June 30, 2028 through your WA Cares exemption account.³ Premium withholding resumes, you don’t owe back premiums for the exempt years, but those years also don’t count toward benefit eligibility.

How to Apply

H-1B and L-1 visa holders skip this section entirely. The remaining three groups apply through the Employment Security Department’s online system.

The document you upload depends on your category. Veterans submit a DD Form 214 or a VA disability award letter showing a rating of at least 70 percent. Military spouses and registered domestic partners submit proof of the marriage or partnership together with the service member’s current active-duty orders. Out-of-state residents submit a driver’s license or utility bill establishing a primary residence outside Washington. Everyone needs a Social Security Number or Taxpayer Identification Number and the employer’s name. All documents are scanned and uploaded; the process is entirely online.

Applications go through SecureAccess Washington (SAW), the same login used for the Department of Licensing and other state agencies.⁴ If you already have a SAW account, use it. Navigate to the WA Cares exemption section, choose your category, attach documents, and submit. Names and dates on the form need to match the uploaded documents exactly; mismatches are the common reason applications get kicked back. ESD does not publish a processing timeline.

What Happens After Approval

ESD mails an approval letter with an effective date, which is the first day of the quarter after approval.³ You then give a copy to every current employer in writing. The employer must stop withholding the 0.58 percent premium no later than the first day of the quarter after they receive your notice.⁵ If approval lands in February, the exemption takes effect April 1, and the deduction should stop on that paycheck. Check your pay stubs to confirm.

The exemption is not retroactive. Any premium withheld before the effective date stays withheld, with no refund.³ Every paycheck between your submission and your approval still includes the tax.

Reporting a Change in Status

If you lose the condition that qualified you, you have 90 days to notify both ESD and your employer.¹ Common triggers: an active-duty spouse separates from the military, an out-of-state commuter moves to Washington, or a visa holder gets a green card. Withholding resumes once you report it.

Failing to report a change that invalidates your exemption can mean back-payment of every premium you should have owed, plus additional penalties.⁶ The program does not publish specific penalty amounts, but 0.58 percent of wages over an unreported period adds up quickly. The obligation is on the employee, not the employer.

What You Give Up by Opting Out

An approved exemption permanently disqualifies you from receiving WA Cares benefits.³ The benefit begins in July 2026 and is worth up to $36,500 per person, indexed to inflation over time, drawn down as a spending account against approved long-term care services rather than paid as a lump sum.²

Paying premiums is not the same as qualifying for the benefit. Three pathways to eligibility exist:⁷

Permanent access after contributing for at least 10 qualifying years with no gap of five or more consecutive years. A qualifying year is 500 or more hours worked while paying the premium.
Temporary access if, when care is needed, you’ve contributed in at least 3 of the last 6 years.
A transition pathway for anyone born before January 1, 1968: lifetime access to a partial benefit equal to 10 percent of the full amount for each qualifying year of contributions.

The math matters most for out-of-state commuters and military spouses. Exempting yourself resets nothing you’ve already paid, but those years no longer count toward the 10-year threshold and you’ll never draw a benefit. For someone new to Washington work or unlikely to stay, the tradeoff can be reasonable. For someone six or seven years in, it deserves harder thought.

Portability is another factor. Today, you must live in Washington to use benefits. Starting July 2026 you can choose to keep participating after moving out of state, and out-of-state participants will be able to receive benefits beginning July 2030.⁸ That weakens the case for the out-of-state commuter exemption if you plan to keep working in Washington long enough to vest.

Self-Employed Workers and Tribal Employees

The premium applies automatically only to employees, so the exemption framework doesn’t fit self-employed workers the same way. Participation is voluntary, and if you want in you must elect coverage by June 30, 2026, or within three years of first becoming self-employed, whichever is later.⁹ Once elected, contributions start the following quarter and continue until you retire or stop being self-employed. Enrollment goes through SAW.

Federally recognized tribes decide whether to participate at all. When a tribe opts in, all employees of its tribal businesses are covered and pay the standard 0.58 percent, with no employer share.¹⁰ If a tribe does not opt in, its employees may lose credit for years they previously contributed through a non-tribal employer.

1
WA Cares Fund. Exemptions
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WA Cares Fund. Benefit Coverage
3
Washington State Legislature. Washington Code RCW 50B.04.085 – Conditional Exemptions
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WA Cares Fund. Apply for an Exemption
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Washington State Legislature. Washington Code RCW 50B.04.080 – Long-Term Services and Supports Trust Program Exemptions
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WA Cares Fund. Employer Information
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WA Cares Fund. How the Fund Works
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WA Cares Fund. Qualifying for Benefits
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WA Cares Fund. Self-Employed Elective Coverage
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WA Cares Fund. Tribal Governments