Distribution and taxable amount are not the same.
The only reason for box 16 at all is if there are two states and part of the total box 1 distribution must be allocated to each state. In the case of only one state then the state distribution and Federal distribution are the same amount. That is why financial institutions generally leave box 16 blank, The distribution is the amount that you receive and that is the box 1 amount.
In reality it is a difference without a distinction in most cases but a taxpayer can elect to have any percentage of state tax withheld. It is entirely possible to have more state withholding then the box 2a amount and that will cause a processing error since the state tax cannot exceed the state distribution but it can exceed box the 2a amount.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
