I'm not sure why I am having a problem either. The W-2 information was entered correctly (I double-checked when I got the penalty letter). They wanted me to pay income tax on the Box 3 wages, not Box 1 or 16 (state). Apparently the reduction in wages that the IRS allows for the retirement plan payments is not allowed by NYS? I have not been able to find that information on their website anywhere or within TurboTax.
