I have been testing this issue for a while to see if I could determine what was causing the error. Similar to the last several years, I had a distribution from a non-qualified plan in 2023 and entered my W-2 using EasyStep like normal. However, when looking at the forms menu, Form W-2 showed an error. When I opened the form, the error was indicated in the State Allocation field of Box 11 even though it matched exactly what was automatically posted in the first two fields. I eventually rounded the amount in the second field to match the rounded amount that TurboTax automatically posted on Schedule 1, line 8t. TurboTax then automatically updated the amount in the third field (State Allocation amount) to that rounded amount and the error went away. From the testing I found that the second field (Distributions from sect. 457 and nonqualified plans) creates the error when cents are included.
For a simple example, let's say you receive only one W-2 and the amount in box 11 is $100.85. When you enter that W-2 using EasyStep, TurboTax automatically posts that amount on Form W-2 in all three amount fields of Box 11 and displays an error in the last field. If you change the amount in the second to $101.00 to match the TurboTax-rounded amount shown on Schedule 1 line 8t, the third field automatically changes to $101.00 and the error goes away. If you want, you can change the amount in the third field back to $100.85 with no error. In fact, you can change the amount in the third field to any amount from $100.50 to $101.49 with no error. I feel pretty sure the software is not properly handling cents and rounding correctly in this situation.
The state allocation fields in Form W-2 Box 11, (a) State ID and (b) Amount of distributions for state, are new this year (at least for my version TurboTax). For reference, I am using the desktop version of TurboTax 2023 Premier on an iMac running macOS Ventura 13.6.3.
