Yeah, the issue of persons moving between states can be a problem especially as it relates to box 1 and 2a when they are different....and I suspect it would have to be resolved in the state part-year tax returns Q&As and income allocation sections.
As for the withholding possibly being higher than 2a, I would guess it could be remotely possible. But when I ask for a specific % withholding from my 401k every year, they (Fidelity) always uses the 2a value as the starting point for the calculation, so greater than 2a wouldn't be possible (or could I ask for 105% since box 1 is higher? Or would they refuse? )
I would still worry far more about how the various different state's software treats the State Distribution Amount entry when the sate allows all, or a specific amount, to be subtracted from Federal AGI ....when box 1 and 2a differ, that state deduction can never be greater than the $$ included in Federal income....and that's how the NC software has historically used that Distribution Amount entry.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
