Incorrect CA SDI reported on W2

[bc3m]

Hi,

My husband's employer mistakenly withheld about $7.00 over what they were supposed to for the CA SDI. Last week, we received the W-2 form along with the cash refund and a letter stating the CA SDI error the employer had made. The W-2 form has been reported with the incorrect information under CA SDI ($7 over since they refunded the extra withholding with cash). The employer letter that came with the W-2 form states what the correct amount should be and asks us to use the correct amount from the letter when filing our tax return.

I had my husband request his employer to provide a "Corrected W-2". They refused and said that the CA SDI is not reported to the IRS and is irrelavent. Is this true? I just don't want to file our return with the incorrect W-2 information making the IRS think we made a mistake on our return.

On the back of the W-2, it states the following. "Be sure to ask the employer to file Form W-2c, Corrected Wage and Tax Statement, with the Social Security Administration (SSA) to correct any name, SSN, or money amount error reported to the SSA on Form W-2." This tell me that they're supposed to correct any errors regardless of whether they think it's relevant or not. Please advise. Thanks!

[S T]

Calif SDI

Calif SDI is abbreviated for Calif State Disability, in the event you are put on medical disability for surgery or illness longer than 7 days. Then Calif pays you a weekly disability amount.

It is okay. As a California preparer of taxes as well as payroll, the Employer is not necessarily required to issue a corrected W-2 form. The Calif SDI does not affect any item that is being reported to the SSA for your Social Security or Medicare Records. They should for the record, but probably they won't since it does not affect wages, or actual federal or state tax withholding.

Since the employer refunded you the excess amount collected, use their new figure that they provided in the letter to enter for your line 5, Schedule A deduction along with your State income tax withholding. If you want to check the amount, it is the wages X .006 which should equal the new amount that they provided.

For background, they found the error when they prepared their Annual Reconciliation to the EDD at California and have made the appropriate adjustments in their reporting and certified the same to California.

Sandy

[joanmcq]

SDI isn't reported to the Fed (although it is deductible as a state tax on Sch A) and is not used in computing the state taxes. So the payroll person is correct; they don't need to prepare a corrected W-2.