New Jersey taxes certain benefits that are pre-tax for federal income tax purposes. The most common is the taxation of pretax retirement deductions for retirement plans other than a 401(k), such as a 403(b) plan.
I suggest checking with your payroll department before making any subtractions.
You can make adjustments on the screen “Other Wage Adjustments - W-2.”
Common New Jersey wage adjustments include:
- Employee elective amounts contributed to all types of pension plans other than a 401(k) plan
- Cafeteria plan contributions
- IRS section 137 adoption expense benefits
- IRC section 129 dependent care benefits
You can make also adjustments in “Expense Reimbursements” if expense reimbursements were included in your taxable W-2 wages, such as meals and lodging, employee business expenses, and moving expenses.
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