Yes, Massachusetts does allow the 401-K deduction.
The W-2 is the standard form for recording 401-K contributions.
- This will be recorded in Box 12 with Code D.
- You will note that Box 1 will be less than Box 5
- Box 1 is earned wages less deductions (Like 401-K contributions)
- Bos 5 is Medicare wages which is the total wages
- You will find that Box 16 State wages will match Box 1, which does not include the 401-K deduction.
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