My wife worked for two companies in 2022 and had excess SDI withheld ($718 (company 1) + $1103 (company 2)= $1821 total). The maximum SDI limit for 2022 is $1601.60 = 1.1% of $145,600. That's $219 excess SDI withheld. However, the online turbotax completely ignores this and does not include it in the return (line 74 in CA540). The reason, I believe, is that the inclusion of excess SDI is likely triggered by sum of her two W2 box 1 values (tips, wages, other). This number, in her case, comes out to be $145,130, which is less that $145,600. However, SDI withheld throughout the year is not based on this number, so this should not be the threshold for calculation of the excess SDI. Because of this bug, my current CA is wrong. I've spend over 4hrs on the phone with different folks at TurboTax. Either they don't understand the problem or they don't know how to fix it. Please help.
To clarify, do the amounts in Box 14 of both W2's equal $1821?
One thing to check. Make sure each W2 is entered under her name. Is the EIN different on each W2? And if the SDI is in box 19 move it to box 14.
The sum of Box 14 amounts from the two W2s is $1821. (thanks for the clarifying question).
Checked. Looks like everything is entered correctly.
One more thing that I tested. When I increased W2 box 1 entry in one of her W2s by $2000, which made the sum total of both W2s box 1 entries above the threshold, the software calculated the excess SDI withheld. That’s why I think that is the trigger.
One thing that usually helps is to delete the W2s and re enter them by hand. That usually clears something out. Box 1 wages should not matter. It might be messing up if it thinks one employer went over the max. So take each box 1 x .011. Is the SDI more? Try reducing the SDI to less. Try leaving off the cents.
@VolvoGirl Just tried deleting W2s and re-entering manually. Didn't help. All I need to do is adjust one of the W2s box 1 values such that the sum of my wife's W2 box 1 values is above $145,600 by a single dollar, and California excess SDI get calculated properly (based on what is entered in box 14 of her W2s). If the sum of her W2 box 1 values is equal to or less than $145,600, the California excess SDI does not get calculated or incorporated in the return.
Then it sounds like one employer took out too much if her total wages are less than the max. What is in box 1 and 14 for each W2?
W2 #1: Box 1 - $57,832; Box 14 - $718 (SDI)
W2 #2: Box 1 - $87,298; Box 14 - $1103 (SDI)
Total: Wage (box 1) = $145,130; SDI (box 14) $1,821
I think the problem here is that California SDI withholdings are not actually based on pay that is reported in box 1 of W2, but Turbotax sets the threshold for calculation of excess SDI withheld based on box 1 in W2.
The relevant wages for the the calculation of SDI withholdings should be box 1 in W2 + 401K withholding - GTL (group term life benefit): $145,130 + $20,503 - $86 = $165,547
1.1% of $165,547 = $1,821!!!
That has been a Turbo Tax issue for as long as I can remember. Years!! I had to go in a manual input the excess
I'm having this problem now. Turbo tax wont allow the Efile to go thru because it's over the $1601.60 limit. I paid for Efile because there were no errors and now it's saying there is an error and wont let me Efile. How do we fix this Turbo Tax glitch? The input I have matches the W2 exactly so it's not an error on my end. HELP!!!
I'm talking about the SDI and VPDI on box 14 of the W2. Both these amounts are posted on the W2 and turbo tax is asking me to fix the form 540 since I'm over by 133.00 but these are the amounts that are on my W2, so am I supposed to not show whats on my W2? this is the first year the employer has put 2 items in box 14 and now it's screwing everything up. I'm ready to file, please advise on what I can do to move this along
How do you input manually? If it says $133 is over where do I fix that?
Please try the following steps and let us know if this does not work;
You will need to make your entries in the step-by-step section to have them pulled into your forms.
Try the following:
Your input in this section will pull into your state return and the calculation will be done by TurboTax as applicable.
Please also see additional information in the link below:
@HopeS Thanks for the link, but I’ve already tried this. Excess SDI calculation should not be triggered based on total of entries in box 1 of W2. It should be either triggered by the actual SDI withheld or the gross income, which is what SDI withholding is based on. TT for some reason triggers SDI withholding calculation based on W2 box 1 entries but that is wrong.
@smmb1 How do you enter it manually with online version of TT?
Some TurboTax Online/Desktop customers have been experiencing an issue when they live in California and have excess SDI deductions. There isn't presently an option to enter the credit in Interview mode.
We’re working to resolve this issue. If you’d like to receive progress updates, please sign up at this help article link.
Taxpayers who file a California return would request the credit for excess SDI on their California return. In a case where you have SDI withheld by a single employer that exceeds the annual limit ($1,601.60 for 2022), you would need to request a refund from the employer. If you don't have a California tax return filing requirement, you would request a refund of Excess SDI through the California EDD. See here for the California EDD refund form.
When will this be updated? I've paid for my State Tax to be submitted electronically. Should I submit manually and I get a refund because I can't submit because of this bug? The link to stay informed isn't working.
thank you!
The issue with the excess SDI credit has been fixed very recently, which is why the signup link is no longer active. Users who reported the issue at the link were sent the following email on April 7th:
"There’s an update on the TurboTax help article you’re following: "[California Excess SDI]".
We’re happy to inform you that we’ve updated TurboTax and resolved the issue you experienced
If you’re using TurboTax Online, it’s been updated automatically. Just sign in and you can continue working.
If you’re using the TurboTax CD/Download Software, download and install the latest update. You can do this through the prompt when you launch the software or by following these instructions."
If you had excess SDI withheld by a single employer, the credit doesn't apply and you would need to request a refund from the employer. The SDI taxable wage limit is $145,600 per employee for the calendar year 2022. The maximum to withhold for each employee is $1,601.60.
If you are seeing an error message that the amount exceeds the limit, you can just enter the limit in Box 14 of the W-2, and request a refund from the employer.
See this California FTB webpage for more information.
If you had two employers, and the amount both withheld together came to more than the limit, then you may get a credit for the excess. See the discussion in this thread for more information.
@MonikaK1 any chance you can clarify exactly what problem was actually fixed and how? In my case, it doesn’t appear to have fixed anything.
I just tried the submittal again. I have $0 for SDI excess and it keeps kicking it back in the final check so I can't submit. I've restarted the software, the computer, and all patches are updated. Not fixed for mine. Should I get a refund for the State tax and submit hard copy??? Thank you!
@whateverdeh555 I ended up using another tax software that didn’t have this bug and asked for a refund from TurboTax.
Thank you! How did you request the refund? I'm hoping they can still fix this in time, but I should get refund if it's not done in coming days. Thx again!
@whateverdeh555you can search for “how do I request a refund for my TurboTax product?” and it will give you an option to select what product you want a refund for and why. Since I used online version, this approach resulted in automatic denial of the request. I ended up calling TT, first person gave me some standard answer of we can’t do anything about that, but I asked to speak to the manager, who understood the issue and approved the refund for the online version.