Someone else was having an issue with that the other day.
I "think" the solved it by deleting the W-2, and then entering it manually from scratch. (no pictures, no import from a W-2 provider). I also think they were having an issue with the correct State employer ID# in box 15 not getting entered properly.
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If all that doesn't work, you'd have to call Customer Support...then can double-check the issue and get a software correction ticket submitted:
What is the TurboTax phone number? (intuit.com)
Please try this:
Enter your W-2 as is (with the PA amount in box 16 larger than the federal amount in box 1 by the amount of your 401(k) or 403(b) contribution or whatever).
Go to the Pennsylvania state return (to start it again). Go through answering the questions. When you get to "Compensation Summary", instead of clicking Edit, click Done.
If the state income is correct in box 16 on your W-2, you don't need to click edit. In this way, you'll never see that screen that claims that "(PA Taxable Amount) can't be more than your federally adjusted wages".
Continue through the rest of the PA interview. At the end, please click on Tax Tools on the left, then Tools below that, then on View Tax Summary in the center, and admire your state summary. Confirm that the first line (Taxable Compensation) is the box 16 amount (which means that your issue is solved).
Now continue with your return.