Effective January 1, 2021, the California State Disability Insurance (SDI) rate increased from 1.00% to 1.20%. In addition, the taxable wage limit for SDI increased from $122,909 to $128,298. The 2021 rate and wage base changes did not go live in payroll until the 22102 payroll update, released on January 7, 2021.

If you already submitted a 2021 CA PIT/SDI tax payment, the SDI was underpaid by 0.20%. On your next CA PIT/SDI tax payment, the additional tax due will be automatically calculated into your payment. This will bring your total CA SDI tax paid to the correct amount of 1.20% for the first quarter of 2021.

Based on our conversations with the California tax agency, we do not expect this issue will create underpayment penalty notices. If we find that penalties will be assessed, we will contact your business directly with additional information in the near future.
We apologize for the late addition of this 2021 rate and for any inconvenience this may have caused.


The QuickBooks Payroll Team

Leave a Reply