Do I have to pay taxes on my EDD SDI pregnancy benefits?

Congrats on your pregnancy! Yes, SDI benefits ARE taxable at the federal level but NOT at the state level in California. So you'll need to set aside money for federal taxes, but you won't pay CA state taxes on these benefits. When I was on pregnancy disability last year, I opted to have federal taxes withheld (it's optional). You'll get a 1099-G form in January 2026 that shows your total benefit amount for tax filing.

my sister just had her baby and she said she didnt have to pay any taxes on her SDI checks, so maybe the other person is wrong?? idk for sure tho

JUST A WARNING!!!! When I was on pregnancy disability in 2024, I chose NOT to have taxes withheld and REGRETTED IT COMPLETELY!!!! Had to pay a big chunk at tax time AND got hit with an underpayment penalty!!! DEFINITELY have them withhold federal taxes - it's only 10% but at least it's something. The EDD website even has a form for this (DE 4P) that you should submit with your claim!!!!

To clarify what others have said: 1. California SDI benefits for pregnancy are subject to federal income tax, but exempt from California state income tax. 2. Federal tax withholding is optional. If you choose to have taxes withheld, it's a flat 10% rate. 3. You'll receive a Form 1099-G by January 31 of the following year showing your total benefits received. 4. You can request federal tax withholding when you initially file your claim or later by submitting the DE 4P form. I also recommend calculating how your maternity leave might impact your overall tax situation. Sometimes being on reduced income for part of the year puts you in a lower tax bracket.

When I was pregnant with my first baby I had such a horrible time trying to get through to EDD about my pregnancy claim! I kept calling for literally weeks and couldn't get anyone to answer basic questions like this one. Eventually I found this service called Claimyr (claimyr.com) that got me connected to an actual EDD agent in like 20 minutes after I'd been trying for days on my own. They have a video demo at https://youtu.be/1X-mEsLtbmQ?si=1hcSq3KFtCr4oAmd that shows how it works. Definitely worth it for the peace of mind!

One thing nobody mentioned yet - if you're transitioning from SDI pregnancy disability to Paid Family Leave (PFL) after birth, the tax situation is exactly the same for both. Federal taxable, CA exempt. Just mentioning it because most new moms use both programs back-to-back and it can get confusing!

This is totally random but I just went back to work after my maternity leave and my cat keeps sitting on my work laptop during zoom meetings lol... but anyway about taxes, I had the 10% withheld and it wasn't enough, still owed a bit at tax time. Just sharing my experience!

There's some conflicting information in this thread, so I wanted to clarify based on the official EDD guidance: California SDI benefits (including pregnancy disability) ARE subject to federal income tax but NOT California state income tax. This is different from some other disability benefits that might be federally tax-exempt. For budgeting purposes, I'd recommend having the 10% federal tax withheld when you file your claim - you can request this on the DE 4P form. Even if 10% isn't quite enough (depending on your tax bracket), it's better than owing a large amount at tax time. You can always make quarterly estimated payments if needed. Also, keep good records of your benefit payments throughout the year since you'll need them for tax filing even before you receive your 1099-G form in January!

Just want to add my experience from when I had my baby last year! I initially didn't have federal taxes withheld from my SDI pregnancy benefits because I thought it would be such a small amount. BIG mistake - ended up owing around $800 at tax time which was definitely not in my new-mom budget! For anyone reading this thread, definitely opt for the 10% federal withholding when you file your claim. Even if it's not perfect, it helps SO much. Also, keep track of all your benefit dates and amounts because the 1099-G form you get in January sometimes has errors. I had to call EDD to get a corrected form because they had the wrong total on mine. One more tip - if you're planning to take both SDI for pregnancy/recovery AND PFL for bonding time afterward, remember that both will be taxed the same way federally. So if you're getting benefits for several months total, that taxable income can really add up! Congrats on your pregnancy and good luck with everything! 🎉

Just wanted to jump in here as someone who recently went through this whole process! I can confirm that SDI pregnancy benefits are indeed subject to federal taxes but not California state taxes. I had my baby 6 months ago and learned this the hard way - I chose not to have taxes withheld initially because I didn't realize SDI was taxable income. When tax season came around, I ended up owing about $600 in federal taxes on my benefits, which was definitely not ideal with a new baby. My advice: absolutely opt for the 10% federal tax withholding when you file your SDI claim using the DE 4P form. Even if 10% isn't exactly right for your tax bracket, it's so much better than getting hit with a big bill later. You can always adjust by making quarterly payments if needed. Also, start keeping a simple spreadsheet of your benefit payments now - dates and amounts. The 1099-G form you'll get in January 2026 should have all this info, but it's good to have your own records just in case there are any discrepancies. Good luck with your pregnancy and congratulations! The whole SDI/PFL process can seem overwhelming at first, but it's such a blessing to have these benefits available when you need them most.

As someone who just went through this process last month, I can confirm what others have said - California SDI pregnancy benefits are federally taxable but not state taxable. I opted for the 10% federal withholding right from the start using the DE 4P form, and I'm so glad I did! One thing I haven't seen mentioned yet is that if you have other income during the year (like if you work part of the year before going on leave), your SDI benefits could potentially push you into a higher tax bracket than you expect. This happened to a friend of mine who worked until late in her pregnancy - she thought she'd be in a lower bracket because of reduced income, but her combined wages plus SDI benefits actually kept her in her normal bracket. My recommendation would be to not only opt for the 10% withholding but also set aside an additional 2-5% of each payment in a separate savings account, just to be extra safe. Better to have a small refund than owe money when you're dealing with new baby expenses! Also, don't forget that if you transition to PFL after your recovery period, those benefits have the same tax treatment. Congratulations on your pregnancy! 🎉

Adding to all the great advice here - I just want to emphasize how important it is to keep detailed records of your SDI payments! I went through this process 8 months ago and my 1099-G had incorrect dates that made it look like I received benefits in the wrong tax year. It took THREE phone calls to EDD to get it corrected, and each call was at least an hour wait time. I'd suggest creating a simple note in your phone every time a payment hits your account with the date and amount. Also screenshot your EDD online portal regularly showing your payment history. When tax time comes, you'll be so grateful to have your own documentation to cross-reference against the official form. One more thing - if you're planning to use both SDI for pregnancy/recovery AND PFL for bonding time, your total benefits for the year could be pretty substantial (potentially $15,000+ depending on your salary), so don't underestimate the tax impact. The 10% federal withholding is definitely the way to go, but consider setting aside a little extra just in case!

There's definitely some confusion in this thread, so let me share what I learned when I went through this exact situation with my pregnancy last year. California SDI benefits for pregnancy disability ARE subject to federal income tax, but NOT California state tax. This is clearly stated on the EDD website and I can confirm from personal experience. I initially chose not to have federal taxes withheld because I was trying to maximize my take-home pay during leave, but that was a mistake. I ended up owing about $900 in federal taxes on my SDI benefits at tax time, plus an underpayment penalty. Definitely opt for the 10% federal tax withholding using the DE 4P form when you file your claim! One tip that helped me plan better: calculate your estimated total SDI benefits for the full claim period (usually up to 4 weeks before delivery plus 6-8 weeks after depending on delivery type). If you're getting close to your maximum weekly benefit amount, those benefits can add up to a significant taxable amount over several months. You'll receive a 1099-G form in January showing your total benefits for tax filing. Keep your own records too - I had to get mine corrected because EDD had the wrong dates initially. Congratulations on your pregnancy and good luck with the planning!

I see there's been some conflicting information in this thread, but I can confirm from my recent experience that California SDI pregnancy benefits ARE federally taxable but NOT subject to California state tax. I just went through this whole process 4 months ago when I had my daughter. Here's what I wish someone had told me upfront: absolutely opt for the 10% federal tax withholding when you file your claim using form DE 4P. I made the mistake of not doing this initially because I wanted to maximize my take-home pay during leave, but it ended up costing me more in the long run. I owed about $750 in federal taxes on my benefits at tax time, which was definitely not ideal with a newborn. A few practical tips from my experience: 1. Keep your own detailed records of every payment (date and amount) - my 1099-G had some errors that took weeks to correct 2. If you're planning to use both SDI and then PFL for bonding time, remember both have the same tax treatment and the total can really add up 3. You can change your withholding status anytime during your claim by submitting a new DE 4P form if you forget to do it initially The peace of mind of having taxes handled upfront is so worth it when you're dealing with everything else that comes with a new baby. Congratulations on your pregnancy!