What Does SDI Box 19 on Your W-2 Reflect for Tax Filing?

Box 19 on your W-2 form is a key detail for employees in states where State Disability Insurance (SDI) is deducted from wages. Understanding its purpose can influence how you approach tax filing and ensure compliance with state-specific requirements.

What Box 19 Reflects

Box 19 on the W-2 form shows the total State Disability Insurance (SDI) withheld from an employee’s wages during the year. This deduction is relevant in states like California, where SDI is mandatory. The program provides short-term disability benefits to workers unable to work due to non-work-related illness or injury. The amount in Box 19 directly impacts state tax liabilities and potential refunds.

For instance, California’s SDI withholding rate for 2024 is 1.2% of wages, up to a taxable wage cap of $153,164. This means the maximum SDI contribution for the year is $1,837.97. Knowing these figures ensures accurate reporting and withholding, helping to prevent penalties or interest charges.

Calculating SDI Amounts

To calculate SDI contributions, start with gross wages, which serve as the base for SDI deductions. Only wages up to the state’s maximum taxable limit are subject to these withholdings. In California, for 2024, earnings above $153,164 are exempt from further deductions.

Once taxable wages are determined, apply the state’s SDI withholding rate. For 2024, California’s rate is 1.2%. An employee earning $100,000, for example, would contribute $1,200 to SDI by multiplying the wage by the rate. Proper calculation ensures correct withholding and minimizes errors on your W-2.

Implications for Tax Filing

SDI contributions significantly affect tax filing by influencing state tax liabilities and potential refunds. In states like California, where SDI is mandatory, accurate reporting of Box 19 amounts is crucial. Errors can lead to audits or penalties.

Tax professionals should confirm that SDI amounts align with state requirements by cross-referencing the W-2 with state tax codes, such as California’s Unemployment Insurance Code. Discrepancies may require communication with the employer or payroll provider. Correct reporting also helps maximize eligible deductions and credits, directly affecting your tax liability.

Reconciling Discrepancies

Resolving discrepancies in SDI contributions is vital for financial accuracy. Begin by reviewing payroll records and W-2 forms to identify mismatches between reported and actual contributions. Pay stubs and payroll summaries can help verify alignment with state requirements.

If errors are found, notify your employer or payroll provider. Employers are responsible for accurate payroll reporting and should issue corrections, such as a W-2c form, to address mistakes. Timely corrections help avoid penalties under federal tax regulations for incorrect information returns.