Taxable SDI - California

[peggysioux]

Taxpayer has W-2 that shows "taxable SDI - $541 in box 14. Previous preparer input the "taxable SDI" amount on line 21. Usually SDI is already included in box 1 of W-2, but usually W-2 doesn't state "taxable" SDI. How have other preparers handled?

[peggysioux]

Another note to W-2

Box 1 of wages plus deferred income to retirement and the "taxable" SDI adds up to the box 5 of W-2 so taxpayer is already being taxed on the "taxable" SDI. Any idea why the last tax preparer would add to line 21?

[taxea]

Taxable SDI - California

This should go onto Sch A as a medical deduction. CA has SDI and voluntary SDI the voluntary is not deductible. This is not taxable income, this is a taxable deduction...i.e. after tax payment for SDI. taxea

[S T]

Calif SDI

Calif SDI on W-2 in box 14 to be taken as a deduction on Line 5 of the Schedule A, credit for State taxes. Here is a link http://www.edd.ca.gov/direp/diind.htm

For Calif, this is an amount that is deducted from the employee's paycheck, so that at some point in time they can collect a State Disability benefit , if eligible and meet all the requirements.

For 2006 the rate was .8% of wages, maximum wages $79,418 maximum amount per employer deduction $635.54. If the deduction exceeds this amount amongst more than 1 employer (say 2 employers) then the overage can be retrieved through the Calif form 540 return.

Sandy

[dsi]

Agree with Sandy