As far as your federal return, and box 1 of your Form W-2 being less than box 18, you're almost correct -- you're not taxed on the health insurance that you're seeing deducted from box 1, giving you a tax break for your contributions.
And, as far as the W-2 and New Jersey income, you're correct. For your New Jersey return, you use your “State Wages” from box 16 of your W-2, not the federal wages shown in box 1. See the Instructions for 2019 Form NJ-1040 for more information.
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