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Level 2
December 25, 2021
Question

CA SDI tax under-withheld

I use TurboTax to file my taxes. Due to a system error, one of my employers didn't withhold CA SDI taxes for one of my paychecks in 2021.

Here are some pertinent numbers (approximate values) -

  1. Total CA state tax withheld in 2021 - $1957

  2. Total CA state tax I owe in 2021 - $1665

  3. Total CA SDI tax withheld in 2021 - $618

  4. Total CA SDI tax I owe in 2021 - $639

When I file my 2021 CA state taxes using TurboTax, will the underpayment of CA SDI taxes be adjusted with the overpayment of CA state taxes?

Do I need to file anything else or take any action to account for $21 of underpaid CA SDI taxes or will my CA state tax returns take care of everything?

Please answer with as many details as possible.

    4 replies

    Alumni - Intuit
    December 28, 2021

    Your return should not be adjusted for under withholding because of employer error.  The employer will complete the California (CA) state withholding forms which should calculate the correct amount of tax to pay regardless of the amount actually withheld from your paycheck.  When this occurs, the employer may very likely withhold this additional amount from your paycheck upon realization of the error.

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    Level 2
    December 28, 2021

    A follow up. If my employer decides to withhold the additional amount from my paycheck once they realize the error, they'll have to do it in my next paycheck right? I will be getting my next paycheck on 01/07/2022. Wouldn't this affect my 2022 taxes and screw up my 2022 withholding?

    Alumni - Intuit
    January 3, 2022

    No. This should not affect your 2022 withholding because the calculation your employer uses would consider the gross pay before any deductions.

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