Not seeing differences between Federal and Sate W2 Wages taken into account

Forum|Forum|1 year ago
March 16, 2025
3 replies
20 views

Hi, and appreciate the help. My CA @w234_2 wages are lower than the federal ones, with W2 properly entered. However, when doing my state taxes I do not see those differences taken into account, or the lower state wages being used. Should I be doing adjustments myself? Assumed that TurboTax would take those into account.

SteamTrain

Level 15

@gerygutnik

If you were a full-year resident of CA for 2024, then that is correct. CA gets to calculate a tax on ALL your income.

Now, how it ends up getting fully taxed or not depends on what the other state was that you worked in.

If you worked cross-border in OR or AZ, it's handled differently than if you worked cross-border in NV.

But if you worked temporarily in some other state with an income tax during the year, then you can get a credit for the taxes you paid to that "other" state. CA still calculates a tax on all the income, but then allows you a credit for taxes paid to that other state (But not for AZ or OR). You have to prepare the non-resident tax return for that "Other" state first in order to claim that credit.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

gerygutnikAuthor

Level 3

@SteamTrain Thanks for the answer. A follow-up if you don't mind. I don't face the situation of working in other states, but still trying to understand the situation. In CA there are certain wages that CA does not tax vs. federal, so why isn't turbo tax uses Box 16 in W2 which already calculates wages for CA specifically?

SteamTrain

Level 15

@gerygutnik

In order to get an answer of some kind to that, you'd have to describe exactly what specific sort of wages you have in CA, that CA doesn't tax. Then someone with perhaps more specific knowledge of any CA subtleties might be able to guide you.

_____________

For instance, the civilian spouse of a military member posted at a CA base, if that civilian spouse works in CA, but claims a state residency of the same non-CA state as the military member...that person, normally shouldn't be filing a CA tax return at all.

Or is it something else entirely.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*