credit for excess sdi/vsdi - Spidell

credit for excess sdi/vsdi

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Message Board credit for excess sdi/vsdi

This topic contains 4 replies, has 2 voices, and was last updated by Mark Bole 2 months, 2 weeks ago.

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  • #165078
    Lynn Talbott
    Participant

    My client was denied a 2018 credit (form 540, line 74) for excess SDI/VSDI withholding from two employers.  The VSDI withholding is from a PG&E W-2.  I believe FTB is not allowing the credit for the VSDI which is similar to voluntary plan withholding with the designation of VPDI.  The VSDI withholding is the same 1% as regular SDI and VPDI.  Any thoughts?

    Lynn Talbott

  • #165084
    Mark Bole
    Participant

    While VPDI is not deductible as a SALT on Schedule A, it is eligible for excess SDI/VPDI credit, as you indicate.  However, VSDI may be something different (I had never heard of it before).  Apparently VSDI is voluntary short term disability insurance.  Does the employee also have VPDI (or SDI) in addition to VSDI?  Was the VSDI applied on the same wage base as SDI would have been?

    My understanding is that VPDI must provide all the benefits of SDI, at least one benefit better
    than SDI, and at the same or lower cost.  This would include Paid Family Leave, I believe.  Is this true for the VSDI?  If not, I think FTB is correct.

  • #165085
    Mark Bole
    Participant

    Here are some links from PG&E:

    http://mypgebenefits.com/voluntary-plan.shtml

    http://www.mypgebenefits.com/pdfs/Management_A&T_ESC-represented_employees_pay_information.pdf

    They seem to refer both to VDI and STD wage continuation supplements. Is it possible that VSDI is some kind of supplemental short term disability, in addition to VPDI? “PG&E’s STD wage continuation supplements VDI benefits to provide you with an after-tax equivalent of 70% of your basic wage rate on the day prior to your first day of disability. There is no cap to the 60% VDI or 70% STD wage continuation benefit. VDI benefits are not taxable; wage continuation benefits are taxable at the same rate as regular pay. “

    Where and how exactly was it reported on the W-2?

  • #165236
    Lynn Talbott
    Participant

    The links you provided say that the employee must participate either in the voluntary plan (VSDI) or the SDI plan.

    It was reported in box 14 of the W-2 as “VSDI Tax”.  Just as you would see SDI and VPDI and calculated the same as 1% of W-2 comp.

    thanks for your comments.

  • #165367
    Mark Bole
    Participant

    “The links you provided say that the employee must participate either in the voluntary plan (VSDI) or the SDI plan.”

    Yes, except voluntary plans are always, in my experience and in all the course materials I’ve ever seen, designated as VPDI.  I’m saying the simplest explanation is that VSDI is supplemental to VPDI. You are trying to argue that VPDI, used for many years (I have seen it on PG&E W-2s myself), has suddenly been renamed to VSDI.  If you search the internet (which I did), you will find plenty of references to VPDI, relatively very few for VSDI.