Raman Luthra Partner View Bio

Notification of Pending New York State Payroll Tax | What it means to you and your employees

What is the pending payroll tax for?

To fund a State-Run Long-Term Care plan. The proposed LTC Trust Act would require employees to pay a percentage of their income into the state’s long-term care fund. This will not only impact your employees – it will also require administration by your organization to withhold these taxes.

What is the purpose of a state funded long-term care plan?

To help address the challenges of long-term care, including an aging population, current options for long-term care insurance, and new legislation.

When will this happen?

The effective date of the pending payroll tax is yet-to-be determined. This proposed legislation has not passed yet.  We will continue to provide you updates as we receive them.

Long-Term Care (LTC) legislation was recently rolled out in Washington state. Thousands of employers scrambled to find a LTC solution to help employees avoid the tax and receive a more benefit-rich option using employee-funded, payroll deducted solutions. Now, many other states are likely to create similar LTC legislation, including New York State.

We don’t want you to scramble, so Lawley is proactively reaching out to let you know that we can help provide you with solutions so that your employees don’t have to incur this potential tax. Your employees will have 2 options:

  1. Opt-in to a State-Funded LTC plan. This plan may include taxes estimated between 0.5% to 1% of gross wages. For example:
    Tax of 0.5%Tax of 0.75%Tax of 1.0%
    Taxable Income of $50,000$250$375$500
    Taxable Income of $100,000$500$750$1,000
    Taxable Income of $250,000$1,250$1,875$2,500
    Taxable Income of $500,000$2,500$3,750$5,000
    OR
  2. Secure Private LTC coverage – To avoid the potential tax, employees must prove they have a qualified LTC plan. Lawley can assist you with information and tools needed to obtain coverage that satisfies state requirements. If your employees want to take advantage of avoiding the tax implications of a State-Funded LTC plan, this is where we can help you, as the employer. We have the resources and strategic partnerships in place to provide you and your employees with a Private LTC plan.

What should you consider?

Compare Costs | Calculate the potential tax implications of a State-Funded plan compared to the costs of a Private LTC plan.

Compare Benefits | Evaluate the benefits of the State-Funded LTC plan compared to the benefits of a Private LTC plan.

Prepare for Implementation | To comply with pending legislation, ensure you offer this benefit to all of your employees. Keep in mind, Private LTC coverage must be secured prior to yet-to-be determined date.

We are offering Zoom meetings so that we can address your questions and walk you through the most up-to-date information that has been released by New York State. Lawley will keep you in the know and help you through the process as updates are made and details are released on this pending legislation.

Please join us to learn more and select one of the following dates by clicking the corresponding link below:

Wednesday, January 25, 2023 at 2:00 p.m.

Thursday, January 26, 2023 at 10:00 a.m.

If you are unable to join one of the Zoom meetings, you may reach out to your Lawley Consultant or Lawley Service Representative. We will do our best to address your concerns with the information we currently have from New York State.