Federal tax withholding on pregnancy SDI payments - not asked during application

Yes, SDI tax withholding is based on what you selected on your DE 2501 Disability Claim form. There's a specific box you need to check to request federal tax withholding. If you didn't check it, no federal taxes will be withheld. Unfortunately, once your claim is processed, you can't change your tax withholding selection until you file a new claim. Some people just set aside a portion of each payment to cover taxes later.

omg this happened to me too with my pregnancy claim!! no tax withholding and then we owed like $1200 at tax time 🤦‍♀️ so frustrating

The tax withholding option is kinda hidden in the online application. It's on the screen right after you enter your employment information, super easy to miss. I almost missed it too when I filed for my back injury. I think EDD does it this way on purpose lol

Tax professional here. For SDI and PFL, if you didn't select withholding during application, your options are: 1. You cannot change withholding mid-claim with EDD 2. Increase your spouse's withholding at their job to compensate (file a new W-4) 3. Make quarterly estimated tax payments to the IRS 4. Set aside approximately 15-20% of your benefit payments for taxes One important note: California SDI/PFL benefits are exempt from state income tax, but ARE subject to federal income tax. Make sure you're only planning for federal taxes.

this is why the edd system is so broken!!! they make everything confusing on purpose and don't explain important stuff like taxes. i had the same issue with UI last year and ended up owing $3000 i didn't have!!

When I had a similar issue with my SDI claim, I finally managed to speak with an EDD representative by using Claimyr. It's a service that basically waits on hold for you and calls you back when an EDD agent is available. Saved me hours of frustration. I think their site is claimyr.com and they have a video showing how it works: https://youtu.be/1X-mEsLtbmQ?si=1hcSq3KFtCr4oAmd The EDD rep confirmed what others have said - you can't change tax withholding mid-claim. But at least I got a definitive answer instead of wondering and stressing about it.

Just a quick tip - make sure you keep track of EXACTLY how much you receive in SDI and PFL throughout the year. EDD will send you a Form 1099-G in January showing your total benefits, but sometimes these have errors. I had to call and get mine corrected last year because it showed I received $2,500 more than I actually did!

btw congrats on the pregnancy!! despite all the EDD hassles, the time off is sooo worth it. make sure u apply for PFL right when ur SDI ends so theres no gap in payments!! 🤱👶

Just to clarify something important - for Paid Family Leave (PFL), you'll have another chance to select tax withholding since it's technically a separate claim from your SDI. So when you transition from pregnancy disability to bonding time, you can opt for federal withholding on the PFL portion if you want.

Hey Fatima! I went through this exact same situation last year with my pregnancy leave. The tax withholding option is definitely there in the online application, but it's really easy to miss - it's kind of buried in the process and not very clearly labeled. What I ended up doing was having my husband adjust his W-4 at work to withhold extra federal taxes to cover both my SDI payments and the upcoming PFL. His payroll department was really helpful with calculating how much extra to withhold. We also started setting aside about 20% of each SDI payment just to be safe. One thing that helped me was creating a simple spreadsheet to track all payments and calculate roughly what we'd owe. SDI benefits are taxed as regular income, so whatever your normal tax rate is, that's what you'll owe on the benefits. Good luck with everything, and congratulations on your pregnancy! 💕

I'm dealing with this exact same issue right now! Just got my first SDI payment for my maternity leave and realized there's zero federal tax withholding. Like others have mentioned, I definitely don't remember seeing any clear option for tax withholding during the online application process - it must have been really buried or unclear. I'm planning to follow the advice here about having my partner adjust his W-4 to withhold extra federal taxes to cover my SDI and upcoming PFL payments. Does anyone know roughly what percentage of SDI benefits typically gets eaten up by federal taxes? I want to make sure we withhold enough but not too much. Thanks for starting this thread - it's so helpful to know I'm not the only one who missed this!

This is such a helpful thread! I'm currently 32 weeks pregnant and planning to apply for SDI soon, so this is exactly the kind of information I needed to know ahead of time. It sounds like I really need to pay close attention during the online application process to make sure I don't miss the tax withholding option. From reading everyone's experiences, it seems like the key things to remember are: 1) Look carefully for the tax withholding checkbox during the online application (apparently it's easy to miss!), 2) If you do miss it, you can't change it mid-claim, and 3) You'll get another chance to select withholding when you apply for PFL after your SDI ends. Thanks to everyone who shared their experiences and solutions - especially the tip about adjusting your spouse's W-4 withholding to compensate. I'm definitely going to bookmark this thread to reference when I apply in a few weeks!