What Is SUI in Box 14 of Your W-2: SDI vs FLI and Deductions

SUI in Box 14 of your W-2 stands for State Unemployment Insurance, and it shows the amount your employer withheld from your paychecks during the year to fund your state’s unemployment benefits program. Only three states require employees to contribute directly, so most workers never see this line. If you do, the amount is deductible on your federal return when you itemize, as part of your state and local tax deduction. Starting with the 2026 tax year, this entry appears in the new Box 14a rather than the old undivided Box 14.1Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3

Why This Line Exists on Your W-2

Box 14a is the catch-all space where employers report payroll items that don’t fit the numbered federal boxes. The IRS doesn’t require standardized codes here, so employers label entries however they choose. That’s why you might see abbreviations like SUI, PA SUI, NJ UI/WF/SWF, or AKSUI depending on where you work.

Most states fund unemployment insurance entirely through taxes on employers, so employee contributions don’t have a dedicated federal box the way Social Security and Medicare do. In the states that do withhold SUI from workers, employers use Box 14a to document the yearly total. For 2026, the IRS split what used to be Box 14 into two parts: Box 14a carries everything that used to appear in Box 14, and the new Box 14b is reserved only for Treasury Tipped Occupation Codes.1Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3

Which States Withhold SUI From Employees

Three states require employee contributions to the unemployment insurance fund through payroll deduction: Alaska, New Jersey, and Pennsylvania. If you work anywhere else and see an SUI amount in Box 14a, it likely reflects employer-side cost your company chose to report for informational purposes rather than money taken from your check.

  • Alaska. Employees pay 0.50% of wages on a taxable wage base of $54,200 for 2026, capping the annual withholding at roughly $271. State law requires employers to deduct the contribution from each paycheck and hold it in trust until deposit.2State of Alaska Department of Labor and Workforce Development. 2026 Unemployment Insurance Tax Rates3Justia. Alaska Code 23.20.165 – Payment of Contributions
  • New Jersey. Workers employed by contributing employers pay 0.3825% of wages up to $44,800 for 2026. New Jersey W-2s often carry additional Box 14a entries labeled SDI and FLI, which are separate programs with their own rates.4Justia. New Jersey Statutes 43:21-7 – Contributions
  • Pennsylvania. The employee rate varies by year under a trigger formula in the state’s Unemployment Compensation Law. For 2026, it’s 0.07% applied to all wages, with no fixed wage base cap for employees. The dollar amount stays small for most workers.5Pennsylvania General Assembly. Unemployment Compensation Law – Section 301.4

Telling SUI Apart From SDI and FLI

Box 14a can hold several state withholdings that look alike but fund different programs, and the tax treatment can turn on which is which.

  • SUI (State Unemployment Insurance) funds benefits for workers who lose a job through no fault of their own. Withheld from employees only in Alaska, New Jersey, and Pennsylvania.
  • SDI (State Disability Insurance) pays partial wages when you can’t work due to a non-job-related illness or injury. California, New Jersey, New York, Rhode Island, and Hawaii withhold SDI from employees.
  • FLI or PFML (Family Leave Insurance / Paid Family and Medical Leave) covers time off to care for a family member or bond with a new child. New Jersey, among others, funds this through employee payroll deductions.

New Jersey employees often see all three on the same W-2. For federal purposes, mandatory contributions to these state-run funds are deductible if you itemize, but contributions to private or voluntary disability plans are not.6Internal Revenue Service. Publication 17 (2025), Your Federal Income Tax If your employer offers a private plan as an alternative to the state program, those withholdings won’t reduce your federal tax bill.

Deducting SUI on Your Federal Return

Mandatory employee contributions to a state unemployment fund count as deductible state and local taxes. To claim them, you have to itemize on Schedule A rather than take the standard deduction. The IRS specifically allows deductions for mandatory contributions to state benefit funds that protect against loss of wages, which covers unemployment and disability insurance.7Internal Revenue Service. Topic No. 503, Deductible Taxes

Your SUI withholding gets added to your other state and local taxes (income, property, and sales taxes) under the federal SALT deduction. For 2026, that deduction is capped at $40,000 for most filers, or $20,000 for married filing separately. High earners face a phase-down of the cap once modified adjusted gross income rises above roughly $500,000 ($250,000 if married filing separately), with the cap shrinking by 30 cents per dollar over the threshold but never dropping below $10,000.7Internal Revenue Service. Topic No. 503, Deductible Taxes

For most people in the three states that collect SUI from workers, the withholding is small enough on its own that it won’t swing your choice between itemizing and taking the standard deduction. If you already itemize because of high property or state income taxes, though, every dollar helps toward the SALT cap. Don’t skip the SUI line just because the amount looks trivial.

Entering SUI in Tax Software

When you enter W-2 information, most tax programs ask you to identify each Box 14a entry through a dropdown. Look for options like “State unemployment insurance,” “AKSUI,” “NJSUI,” or “PASUI” that match your state. A generic “Other” category usually works as well, because Box 14a items are informational and don’t automatically flow into tax calculations the way Box 12 codes do.

Choosing the right category matters for one reason: it tells the software to include the amount in your state and local tax deduction on Schedule A if you itemize. Miscategorize SUI as a non-deductible item and the software won’t pick it up, costing you a small but legitimate deduction. The label your employer used in Box 14a should point you to the right dropdown.

If the Amount Looks Wrong

Check the math first. Multiply your covered wages by your state’s employee SUI rate. An Alaska worker who earned at least $54,200 in 2026, for example, should see about $271 withheld. If the Box 14a figure is well off from your calculation, contact your employer’s payroll department and ask for a correction.

If your employer agrees the amount is wrong, they’ll file a corrected W-2 using Form W-2c and send you an updated copy.8Internal Revenue Service. About Form W-2 C, Corrected Wage and Tax Statements If your employer won’t cooperate or doesn’t respond by the end of February, call the IRS at 800-829-1040 to file a formal W-2 complaint, or visit a local IRS Taxpayer Assistance Center. Have your employer’s full name and address ready along with your own identifying information.9Internal Revenue Service. W-2 – Additional, Incorrect, Lost, Non-Receipt, Omitted

A disputed Box 14a amount shouldn’t hold up your whole return. Because the SUI figure is informational and doesn’t change the wages or federal tax withholding reported elsewhere on the form, an error there won’t throw off your core tax calculation. It only affects your itemized deduction, and you can amend later once a corrected W-2 arrives.