California workers will see a slight increase in their State Disability Insurance (SDI) withholding starting in January 2025. The tax increase was approved by state officials, intending to provide more funds for the state’s disability insurance program, which is overseen by the California Employment Development Department (EDD). The SDI rate will move from 1.1% to 1.2% in 2025. Every worker earning $100,000 in taxable annual wages will see a $100 increase in their total withholding for the year due to this increase.

This change affects most workers in the state, apart from few working for certain public organizations or under collective bargaining agreements that do not contribute to SDI. The decision to increase the rate was executed by EDD and its director, Nancy Farias. It was revealed that the increase is not linked to the state law, which boosts disability and paid family leave benefits, approved by the state legislature in 2022 under SB 951.

The new legislation will ensure that workers earning less than $63,000 a year will receive 90% of their pay in disability insurance and paid family leave benefits starting Jan. 1, 2025. Higher earners will get 70%. Before this legislation, the rates stood at 60% for higher-income earners and 70% for lower-income workers.

Last-minute communication about this tax increase to the public was found lacking from EDD. This development was first brought to public attention by the taxpayer advocacy organization CalTax. EDD, though, has assured that more information will be provided to the public through the State Disability Insurance webpage.

Contacting the EDD could be complicated if you want specifics about these changes to the state disability insurance program, or you need details related to your personal or family benefits. Navigating the bureaucratic maze can be exhausting. Therefore, it is beneficial to use a service like eddcaller.com. They manage the call queues and connect you to a live person, saving you valuable time and reducing the stress of dealing with multiple automated systems to reach the EDD. Understanding how to get a hold of SDI effectively can be crucial in resolving your queries in a timely manner.