What is CASDI on a W-2? California SDI Explained

CASDI stands for California State Disability Insurance. It is a mandatory payroll contribution for most employees covered by California's State Disability Insurance program. Employers withhold CASDI from employee wages and send those contributions to the California Employment Development Department (EDD). On a California W-2, employers generally report the amount of State Disability Insurance withheld in Box 14, labeled "CASDI." The money helps fund California programs that can provide partial wage replacement when eligible workers need time away from work because of a disability or qualifying family leave.

Table of Contents

What Does CASDI Stand For?
Who Pays CASDI?
What Does CASDI Pay For?
Is CASDI Deductible on Your Federal Tax Return?

What Does CASDI Stand For?

CASDI means California State Disability Insurance.   California's SDI program includes two primary benefits: disability insurance and paid family leave.

Disability Insurance (DI) provides short-term wage replacement for eligible employees who cannot work because of a non-work-related illness, injury, pregnancy, childbirth, or certain other qualifying conditions.

Paid Family Leave (PFL) provides wage replacement for eligible employees who need time away from work to care for a seriously ill family member, bond with a new child, or participate in certain qualifying events related to a family member's military deployment.

Who Pays CASDI?

Employees generally pay CASDI through payroll deductions. Employers are responsible for calculating the appropriate SDI withholding, deducting it from an employee's wages, and sending the contribution to the EDD.

What Does CASDI Pay For?

CASDI contributions help finance California's State Disability Insurance program. That program consists primarily of Disability Insurance and Paid Family Leave.

Disability Insurance

California Disability Insurance may provide short-term wage replacement when an eligible employee cannot perform their regular work because of a non-work-related illness, injury, pregnancy, childbirth, or surgery.

Paid Family Leave

California Paid Family Leave may provide partial wage replacement when an eligible worker needs time away from work to bond with a new child, care for a seriously ill family member, or support a qualifying family member during certain military deployments. Eligible workers can generally receive Paid Family Leave benefits for up to eight weeks within a 12-month period.

Is CASDI Deductible on Your Federal Tax Return?

CASDI is potentially deductible on your federal tax return. The IRS treats certain mandatory employee contributions to state disability benefit funds as state income taxes for federal tax purposes. Employees who itemize deductions may generally be able to include qualifying mandatory California disability contributions when calculating their state and local tax deduction, subject to applicable federal limitations. This does not mean everyone who sees CASDI on their W-2 will receive an additional tax deduction. Whether it affects your federal return depends on factors including whether you itemize deductions and applicable tax limitations. Employees with questions about their individual tax situation should consult a qualified tax professional.