That code can indicate various W-2 abnormalities, but since it’s actually specifying incarceration in your case, I‘m suspecting that “uncommon situations” after the W-2 entry screen should be your next stop. (Here’s a discussion about the FW2-001-02 in general, and as it says, the TurboTax program should be guiding you to fix it when you sign back in.)
In “Federal Taxes,” click on “Wages & Income,” then “I’ll choose what I work on” to update your W-2. Just continue until you see “Let’s check for uncommon situations.” On that page we want to make sure “Inmate or lived in a halfway house” is not checked.
If it’s already blank, double-checking the rest of your W-2 entries (and even deleting that W-2 and re-entering it, especially if it was imported into our program) is worth a try. And you can re-post here if these things aren’t yielding results. (Unfortunately, some rejections can be a little tricky to fix, but we’ll help until it's done!)
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