cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

Why is my NJ income higher in box 16 than in box 1 ?

 
1 Best answer

Accepted Solutions
Level 12

Why is my NJ income higher in box 16 than in box 1 ?

New Jersey does not allow several common pre-tax deductions that the federal government does - this is why your box 1 may show lower than box 16.

See http://www.state.nj.us/treasury/taxation/njit5.shtml

The wages you report for federal tax purposes may be different than the wages you report for New Jersey purposes. For example:

  • New Jersey does not allow you to exclude from wages amounts you contribute to deferred compensation and retirement plans, other than 401(k) Plans. 
  • New Jersey does not allow you to deduct moving expenses or employee business expenses from wages, although you can exclude reimbursements for certain expenses if they are included in wages on your W-2. 
  • If you are considered a “statutory employee” for federal tax purposes, you cannot deduct your business expenses unless you are self-employed or an independent contractor under New Jersey law. The federal label of “statutory employee” has no meaning for New Jersey tax purposes.
1 Reply
Level 12

Why is my NJ income higher in box 16 than in box 1 ?

New Jersey does not allow several common pre-tax deductions that the federal government does - this is why your box 1 may show lower than box 16.

See http://www.state.nj.us/treasury/taxation/njit5.shtml

The wages you report for federal tax purposes may be different than the wages you report for New Jersey purposes. For example:

  • New Jersey does not allow you to exclude from wages amounts you contribute to deferred compensation and retirement plans, other than 401(k) Plans. 
  • New Jersey does not allow you to deduct moving expenses or employee business expenses from wages, although you can exclude reimbursements for certain expenses if they are included in wages on your W-2. 
  • If you are considered a “statutory employee” for federal tax purposes, you cannot deduct your business expenses unless you are self-employed or an independent contractor under New Jersey law. The federal label of “statutory employee” has no meaning for New Jersey tax purposes.