State Disability Insurance

Statutory state disability programs (“mandatory SDI”) are funded by contributions of employees (optionally covered by employers). Employees' contributions may be federally tax-deductible. Details differ, depending on the state.

In some states, employee contributions are mandatory. In other states, a non-mandatory program may be offered.

Mandatory SDI Programs included in Drake Accounting:

1. Mandatory State Disability:

   • California - State Disability Insurance and Paid Family Leave (Family Temporary Disability Insurance)

   • Hawaii - Hawaii Temporary Disability Insurance

   • New Jersey - New Jersey Temporary Disability Insurance

   • New York - New York Disability Benefits Law

   • Rhode Island - Rhode Island Temporary Disability Insurance

2. Mandatory commonwealth disability:

   • Puerto Rico - Puerto Rico Disability Insurance

Set Up Mandatory SDI :

1. Set up Client information with the appropriate State code under Client > Edit > Contact information tab. Click Save to save changes.

2. To set up mandatory SDI information, at Firm > Rates & Withholding Setup > State Setup, enter the correct rates in State Disability Rate, State Disability Wage Base, and State Max SDI Amount fields. The software will display default mandatory SDI information available at the time the software is released. Click Save to save the default information.

   • When you first open this screen after setting up a client, mandatory SDI information appears by default. You must click Save to retain it. If you Exit the screen without saving, the default information is lost.

   • If this screen displays no information or incorrect information, you must manually enter it.

   • You can change and Save the information on this screen as needed.

   • This information is necessary for state reports.

3. Set up the employee SDI deduction at Employees > Deductions and Benefits, select Deductions. Enter the information needed for SDI. Enter the state disability rate in Amount and the state max SDI amount in Ceiling. Select DI from the Withholding Code drop list. This information must be entered. It does not flow from other screens. Click Save to save changes.

4. Set up employees at Employees > Employee Setup. For each employee:

   1. enter the full employee address on the employee’s Personal Information tab.

   2. enter the appropriate State on the State Tax tab.

5. Apply the SDI deduction to each employee at the Employees > Employee Setup > Deductions tab for each employee, select the SDI deduction, enter the state disability rate in Amount and the state max SDI amount in Ceiling. This information must be entered (or retrieved with the F3 key) and saved - it does not flow here from the other screens. Click Save to save changes.

Set Up Non-Mandatory SDI

Other states may offer SDI that is not state mandated. To set up a non-mandatory SDI deduction, follow these instructions:

1. Set up Client information with the appropriate State code under Client > Edit > Contact information tab. Click Save to save changes.

2. Set up the employee SDI deduction at Employees > Deductions and Benefits, select Deductions. Enter the information needed for SDI. Enter the state disability rate in Amount and the state max SDI amount in Ceiling. Select DI from the Withholding Code drop list. This information must be entered. It does not flow from other screens. Click Save to save changes.

3. Set up employees at Employees > Employee Setup. For each employee:

   1. enter the full employee address on the employee’s Personal Information tab.

   2. enter the appropriate State on the State Tax tab.

4. Apply the SDI deduction to each employee at the Employees > Employee Setup > Deductions tab for each employee, select the SDI deduction, enter the state disability rate in Amount and the state max SDI amount in Ceiling. This information must be entered (or retrieved with the F3 key) and saved - it does not flow here from the other screens. Click Save to save changes.