What is the California tax treatment for amounts over the maximum SDI withholding?

In California, if an individual’s income exceeds the maximum State Disability Insurance (SDI) withholding amount, any excess contributions do indeed make them eligible for a refund. This framework recognizes that the SDI tax is intended to be a limited contribution based on income levels, and once that limit has been reached, further withholdings are considered overpayments.

Thus, individuals who have had more than the maximum SDI amount withheld from their paychecks can request a refund for those extra amounts when they file their taxes. This serves to alleviate the financial burden on workers who could be taxed beyond their obligation due to contributions that exceed the established limits. The other options do not align with California's treatment of over-withholdings, as they imply that there would be no return of excess funds or that such amounts are treated differently than they actually are.