How to get credit for excess ca sdi

[LenaH]

If you had excess California SDI withheld, you first must make sure that it was classified correctly in Box 14 when you entered your W-2's. I have attached a picture below for additional guidance. Your excess CA SDI will be credited on your CA 540, line 74.

@malukaly2005

[Marc G1]

I had 2 jobs and paid more SDI (state disability) than the maximum annual withholding.  I had W-2s for both jobs, both of which I uploaded within TurboTax, and both of which showed the SDI amounts and were labeled as such.  However, in calculating my CA state tax payments, TurboTax only included the maximum allowed withholding amount for SDI, not the higher total amount I actually had withheld from both jobs.   As a result, the excess SDI was not reducing my CA 540 taxes, so my tax bill was higher than it should have been.  I found it necessary to manually go into the Forms - Excess SDI Worksheet - to enter the SDI amounts from both jobs.  The manual override worked; however, had I not noticed the problem with TurboTax, and not known enough to locate and make the manual override, I would have paid more CA tax than necessary.

Disappointing seeing these kind of bugs.

[Onefish]

My problem is a bit different. I moved out of state (from CA to NM) in 2018 but my former employer is still paying me deferred compensation which is treated like wages. I am no longer working in either state so could not be disabled on the job. So the SDI withholding is meaningless. Can I file for a refund of the SDI withholding?

[AmyC]

You can have the company stop taking (and refund) the SDI if you qualify to not be considered an employee under the following rules.

TAXABILITY OF EMPLOYEE BENEFITS - EDD - CA.gov states: For Unemployment Insurance (UI), Employment Training Tax (ETT), and State Disability Insurance* (SDI) purposes, “employee” includes an officer of a corporation, an employee under the usual common law rules, and any worker whose services are specifically covered by law. For more information, refer to Information Sheet: Employment, DE 231.

See DE 231 for more on employee.

@Onefish

[angelawong28]

I have the same issue as I had 2 employers. 

I deleted and re-entered the Box 14, but the excess STILL isn't showing up on the CA 540 line 74.

How did you manually adjust the form? 

[Onefish]

This is the reason I only use the CD version of TT. The download version does not allow manual entry.

[Onefish]

Using "override:"
Right-click the line item and select Override (Windows) or choose Override from the Edit menu (Mac). Enter the value; it should turn red, indicating an override. Switch back to the interview by clicking Step-by-Step in the upper right corner.

[bzpoquiz2]

Need help on how to take the CA SDI into account. We have multiple W-2's. One of them already has the max amount for 2021 of $1,539. So in total we have more than the max amount. These amounts are in box 14. How does this impact my CA State Return? What amount should be in form 540, line 74? What is the calculation for that? Should I expect the total amount of CA SDI in form 540, line 74? Or the excess amount over the $1,539 if we add all CA SDI from all W2's? Is that handled by Turbo Tax systematically? Or manual? Reason I asked, I looked at last year's return but no amount was in form 540, line 74.

[MarilynG]

Excess CA SDI shown on Line 74 of Form 540 comes from the 'California Excess SDI Worksheet.'

You may need to save your PDF copy of your return 'with all worksheets' to view this worksheet.  Make sure you entered the SDI on your W-2 entry in your Federal return. 

The three questions at the top all need to be YES.

@bzpoquiz2

[caroljtang]

Thanks so much for this - very helpful! I did this; however it's still flagging this as an error and won't allow me to e-file. Is there a way around this?

[ErnieS0]

Was your California SDI withheld by one employer @caroljtang. If so, you will have to adjust CA SDI on your W-2 and get back the excess from your employer. You will not be able to get a credit for excess SDI withheld by one employer on your tax return, only multiple employers.

The maximum SDI to withhold from employees' paychecks for 2021 is $1,539.58.

Also try some of the solutions suggested in CA SDI tax withheld is greater than max, TurboTax won't let me e-file.

[caroljtang]

It was technically 2 different employers, but both companies use the same payroll processing company (Justworks Employment Group, it's a PEO) so we only received 1 W2 for both jobs combined. When we tried contacting that company, they said we needed to claim it back from the IRS. I've basically entered everything exactly as it appears on the W2 but Turbotax won't let me e-file. The only way I can e-file is if I tweak the SDI amount to be the $1539.58 (which then doesnt match my actual W2). Turbotax doesn't give any other options for e-filing. Just checking if that's the case before I go through the trouble of printing and mailing everything.

[DawnC]

Change the amount to reflect the correct percentages so you can e-file and file Form 843 separately to get back the excess.   TurboTax will not credit you on your tax return.   @caroljtang

See this FAQ - single employer for details

[joshthehappy]

The download version is the exact same thing as the CD - it's the online version that cannot access the forms directly for overides.

[CLHager]

My total SDI/VPDI exceeds the maximum withholding.  It is listed on one W-2 so appears to be from one employer.  However, it is actually 2 employers but due to a bank acquisition as of 12/1/2022 my original employer continued to pay employees through 12/31.  The original withholding was VPDI which shows as 1601.60 and then the new employer portion shows as CASDI for 149.14.  The CASDI portion is the excess; however, since it is on one W-2 Turbo Tax didn't pick it up as excess.  I reviewed  it based on the review process but since it was correct I continued filing.  After paying to file, it won't let me file due to this error.  How can I resolve this without losing the integrity of the W-2?