California VPDI vs SDI deductability

Discussion in 'Tax' started by Josh M., Jan 28, 2004.

  1. Josh M.

    Josh M. Guest

    I've seen a lot of debate on this topic over the years--not
    to rehash the whole debate (search google for "VPDI SDI" for
    more), but I work in CA for a company that offers a VPDI
    short-term disability plan with the same exact costs (but
    slightly better benefits, I believe) as the state SDI plan,
    and I've been on the VPDI plan for the past 10 years. The
    first few years, I deducted the VPDI payments on my federal
    sched A, until doing some research, and then I didn't for
    the past several years, thinking it wasn't deductable.

    However, this year, I noticed that my company (a very large
    tech company) shows "VP-DI 512.24", as usual, but in an
    online "Summary", shows "SUI/SDI (Box 14 of W-2) 512.24".
    This is a personalized summary (with my own numbers and
    categories, i.e. not just a generic listing of items).
    Clicking on the summary line pulls up a screen with "SUI/SDI
    is the amount deducted for State Unemployment Insurance or
    State Disability Insurance." Checking the last 2 years'
    W-2s available online also shows the same thing (with the
    lower contribution amounts of past years)

    So, apparently my company considers VPDI to be equivalent to
    SDI/SUI (which is what's asked for in various tax programs).
    Does this change any opinions here on the VPDI vs SDI
    issue?

    Thanks,

    Josh

    << ------------------------------------------------->>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org >>
    << ------------------------------------------------->>
     
    Josh M., Jan 28, 2004
    #1
    1. Advertisements

  2. Josh M.

    A.G. Kalman Guest

    Josh M. wrote:

    > I've seen a lot of debate on this topic over the years--not
    > to rehash the whole debate (search google for "VPDI SDI" for
    > more), but I work in CA for a company that offers a VPDI
    > short-term disability plan with the same exact costs (but
    > slightly better benefits, I believe) as the state SDI plan,
    > and I've been on the VPDI plan for the past 10 years. The
    > first few years, I deducted the VPDI payments on my federal
    > sched A, until doing some research, and then I didn't for
    > the past several years, thinking it wasn't deductable.
    >
    > However, this year, I noticed that my company (a very large
    > tech company) shows "VP-DI 512.24", as usual, but in an
    > online "Summary", shows "SUI/SDI (Box 14 of W-2) 512.24".
    > This is a personalized summary (with my own numbers and
    > categories, i.e. not just a generic listing of items).
    > Clicking on the summary line pulls up a screen with "SUI/SDI
    > is the amount deducted for State Unemployment Insurance or
    > State Disability Insurance." Checking the last 2 years'
    > W-2s available online also shows the same thing (with the
    > lower contribution amounts of past years)
    >
    > So, apparently my company considers VPDI to be equivalent to
    > SDI/SUI (which is what's asked for in various tax programs).
    > Does this change any opinions here on the VPDI vs SDI
    > issue?


    Everything you would ever want to know about this issue from
    of those us responding on this board is in the 39 post
    thread called CA-VPDI dated 4/1/03 (an appropriate date).

    --
    Alan
    http://taxtopics.net

    << ------------------------------------------------->>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org >>
    << ------------------------------------------------->>
     
    A.G. Kalman, Jan 30, 2004
    #2
    1. Advertisements

  3. Josh M.

    Josh M. Guest

    "A.G. Kalman" <> wrote:
    > Josh M. wrote:


    >> I've seen a lot of debate on this topic over the years--not
    >> to rehash the whole debate (search google for "VPDI SDI" for
    >> more), but I work in CA for a company that offers a VPDI
    >> short-term disability plan with the same exact costs (but
    >> slightly better benefits, I believe) as the state SDI plan,
    >> and I've been on the VPDI plan for the past 10 years. The
    >> first few years, I deducted the VPDI payments on my federal
    >> sched A, until doing some research, and then I didn't for
    >> the past several years, thinking it wasn't deductable.
    >>
    >> However, this year, I noticed that my company (a very large
    >> tech company) shows "VP-DI 512.24", as usual, but in an
    >> online "Summary", shows "SUI/SDI (Box 14 of W-2) 512.24".
    >> This is a personalized summary (with my own numbers and
    >> categories, i.e. not just a generic listing of items).
    >> Clicking on the summary line pulls up a screen with "SUI/SDI
    >> is the amount deducted for State Unemployment Insurance or
    >> State Disability Insurance." Checking the last 2 years'
    >> W-2s available online also shows the same thing (with the
    >> lower contribution amounts of past years)
    >>
    >> So, apparently my company considers VPDI to be equivalent to
    >> SDI/SUI (which is what's asked for in various tax programs).
    >> Does this change any opinions here on the VPDI vs SDI
    >> issue?


    > Everything you would ever want to know about this issue from
    > of those us responding on this board is in the 39 post
    > thread called CA-VPDI dated 4/1/03 (an appropriate date).


    I read that thread, and saw that the consensus was that
    there was no consensus :) My post was meant as a followup
    question--since my employer specifically refers to the VPDI
    amount as "SDI/SUI", how does that fit for those who argue
    VPDI is not deductible:

    a) Is it possible some plans are set up in a way that they
    are deductible, and some not (mine is the same cost, but
    better benefits, than SDI)?

    b) Is my company mistaken in referring to the VPDI payment
    as "SDI/SUI"? I should probably ask what their rationale
    is, but I suspect I'm going to get a vague answer along the
    lines of "Can't give tax advice; see an accountant".

    For this year, I think I'm going to deduct it. If the IRS
    should happen to audit, and feels otherwise, I guess that's
    a risk I'll have to take--based on the arguments in the
    previous threads, and this information from my company, I
    feel I at least have a good faith rationale for taking the
    deduction.

    Thank you all for the excellent advise in this group--the
    first think I do when I have a tax question is check Google
    Groups, and usually the answer is right here.

    Thanks,

    Josh

    << ------------------------------------------------->>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org >>
    << ------------------------------------------------->>
     
    Josh M., Feb 2, 2004
    #3
  4. Josh M.

    A.G. Kalman Guest

    Josh M. wrote:
    > "A.G. Kalman" <> wrote:
    >> Josh M. wrote:


    >>> I've seen a lot of debate on this topic over the years--not
    >>> to rehash the whole debate (search google for "VPDI SDI" for
    >>> more), but I work in CA for a company that offers a VPDI
    >>> short-term disability plan with the same exact costs (but
    >>> slightly better benefits, I believe) as the state SDI plan,
    >>> and I've been on the VPDI plan for the past 10 years. The
    >>> first few years, I deducted the VPDI payments on my federal
    >>> sched A, until doing some research, and then I didn't for
    >>> the past several years, thinking it wasn't deductable.
    >>>
    >>> However, this year, I noticed that my company (a very large
    >>> tech company) shows "VP-DI 512.24", as usual, but in an
    >>> online "Summary", shows "SUI/SDI (Box 14 of W-2) 512.24".
    >>> This is a personalized summary (with my own numbers and
    >>> categories, i.e. not just a generic listing of items).
    >>> Clicking on the summary line pulls up a screen with "SUI/SDI
    >>> is the amount deducted for State Unemployment Insurance or
    >>> State Disability Insurance." Checking the last 2 years'
    >>> W-2s available online also shows the same thing (with the
    >>> lower contribution amounts of past years)
    >>>
    >>> So, apparently my company considers VPDI to be equivalent to
    >>> SDI/SUI (which is what's asked for in various tax programs).
    >>> Does this change any opinions here on the VPDI vs SDI
    >>> issue?


    >> Everything you would ever want to know about this issue from
    >> of those us responding on this board is in the 39 post
    >> thread called CA-VPDI dated 4/1/03 (an appropriate date).


    > I read that thread, and saw that the consensus was that
    > there was no consensus :) My post was meant as a followup
    > question--since my employer specifically refers to the VPDI
    > amount as "SDI/SUI", how does that fit for those who argue
    > VPDI is not deductible:


    Sorry for the delay in responding.

    > a) Is it possible some plans are set up in a way that they
    > are deductible, and some not (mine is the same cost, but
    > better benefits, than SDI)?


    It is my view that unless your payment goes to the state of CA
    (your company is nothing more than an "agent") it is not a tax.

    > b) Is my company mistaken in referring to the VPDI payment
    > as "SDI/SUI"? I should probably ask what their rationale
    > is, but I suspect I'm going to get a vague answer along the
    > lines of "Can't give tax advice; see an accountant".


    Maybe your payment is CASDI and not VPDI.

    --
    Alan
    http://taxtopics.net

    << ------------------------------------------------->>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org >>
    << ------------------------------------------------->>
     
    A.G. Kalman, Feb 10, 2004
    #4
  5. Josh M.

    BruceZ4

    Joined:
    Mar 13, 2011
    Messages:
    1
    But...California MANDATES the payroll deduction

    California mandates the payroll deduction. It MUST either be the state's plan or the employer's voluntary disability plan. Employees may NOT opt out. I would absolutly disagree with anyone who says you cannot, and I am SURE the IRS has NEVER challenged anyone's using that tax deduction on Schedule A.

    What makes this worse is many accountants will "weiner" out from using this deduction for their clients and NOT enter the deduction on Line 5. H&R Block accountants will NOT include the deduction. And H&R Block At Home Deluxe software for 2010 will NOT make the deduction. People are entitled to this deduction, and simple FEAR by accountants using this puts the profession to shame.

    It is government required, it IS deductible, and you show me one case where the IRS came back and took the deduction away, I dare anyone.
     
    BruceZ4, Mar 13, 2011
    #5
  6. Josh M.

    Cruzy

    Joined:
    Jul 11, 2011
    Messages:
    1
    Bruce, perhaps accountants who take their professional duties seriously do not deduct employee withholding payments made to voluntary disability plans because they have read IRS Rev. Rul 81-194, and that ruling by the IRS specifically states that such employee withholding payments to California voluntary plans are NOT tax deductible.

    Only the EMPLOYER may take a deduction for any contributions the EMPLOYER makes to such plans, as such payments are considered business expenses.
     
    Cruzy, Jul 11, 2011
    #6
    1. Advertisements

Want to reply to this thread or ask your own question?

It takes just 2 minutes to sign up (and it's free!). Just click the sign up button to choose a username and then you can ask your own questions on the forum.
Similar Threads
  1. Katie Jaques

    Re: CA-VPDI

    Katie Jaques, Jul 2, 2003, in forum: Tax
    Replies:
    9
    Views:
    2,859
    Vernon Chatman
    Jul 23, 2003
  2. D. Stussy

    Re: CA-VPDI

    D. Stussy, Jul 12, 2003, in forum: Tax
    Replies:
    0
    Views:
    748
    D. Stussy
    Jul 12, 2003
  3. D. Stussy

    Re: CA-VPDI

    D. Stussy, Jul 14, 2003, in forum: Tax
    Replies:
    0
    Views:
    980
    D. Stussy
    Jul 14, 2003
  4. Chris
    Replies:
    1
    Views:
    4,786
    Chris
    Mar 9, 2005
  5. Irina
    Replies:
    1
    Views:
    801
Loading...

Share This Page