That is unusual. Certain benefits that are deducted on your Federal Box 1, are not deducted on your state return.
Some people may see a difference between Box 1 Federal Wages and Box 16 State Wages due to the value of certain pre-tax retirement or things like transportation benefits.
On your W-2:
- Is Box 1 larger than box 3?
- If it is, is there an entry in box 12, or 14 that could explain it?
- If box 1 is not larger than box 3
- Is box 16 the same as box 1.
- Calculate the difference and see if there is a benefit, or retirement contribution that matches the difference.
- Is there any indication of a reason for a discrepancy.
You might want to review your state reconciliation worksheet.
This does not answer the question of how to resolve the issue, please write back with additional details.
If these observations do not yield a reason for the difference, I suggest you contact the payroll company and request an explanation.
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