Your medicare wages could be higher that your PA wages if Box 12 shows imputed income for Life insurance over 50K or shown as code C. PA does not tax this imputed income. However, PA does tax 401K contributions. They are not taxed in PA when they are pulled out, unlike the Federal. I'm not sure why everyone thinks that 401K contributions reduce taxable PA wages on your W-2. It is simply not true. PA is rather unique in this aspect.
In other words.....
PA does not tax Box 12 code C wages
401K contributions are not pre-tax in PA, unlike most other states. When 401K contributions are pulled out at a later date, they are not taxed because the tax has already been withheld.
Medicare and PA wages should be the same other than a deduction for imputed income (code C) from PA.
PA state and PA local wages should agree on the W-2.
