topic NonQualified Deferred Comp taxed twice -MA return in State tax filing

NonQualified Deferred Comp taxed twice -MA return

Belle of the Woods — Mon, 23 Feb 2026 12:54:26 GMT

Non-Qualified Deferred Comp payment reported on a W-2 is correctly entered on federal Schedule 1, Line 8t. However, when TT transfers this amount to my MA state return it is included as both W-2 income and Other Income-MA Schedule X, Line 4. How does this get fixed? The state return is incorrect due to automatic double reporting of this income.

Re: NonQualified Deferred Comp taxed twice -MA return

MarilynG1 — Fri, 10 Feb 2023 17:47:02 GMT

If you have an amount in Box 1 and in Box 11 on your W-2 reporting deferred compensation, this may be causing your issue with Massachusetts Schedule X.

In TurboTax Desktop, I was able to resolve this in FORMS by opening Schedule X and clicking on the magnifying glass next to the amount on Line 4.

This opened the Fees and Other Income Statement for Line 4, Schedule X.

Delete this form and the amount on Schedule X, Line 4 is removed.

Re: NonQualified Deferred Comp taxed twice -MA return

John-1955 — Tue, 21 Feb 2023 20:59:21 GMT

I tried deleting Schedule X and it did not work for me. So instead, I changed Box 16 (state wages) on my Deferred Comp W-2 to zero. This now excludes the deferred comp from Wages and includes it in Schedule X. So proper bottom line, but concerned that the W-2 in TT does not agree with W-s that was issued. Any other suggestions? Hopefully TT Team can fix this glitch.

Re: NonQualified Deferred Comp taxed twice -MA return

AmyC — Tue, 21 Feb 2023 22:54:01 GMT

That was smart thinking! The MA INC form is not yet supported and may be part of the issue.

The federal government won't care about the state portion of the w2. Federal only matches federal.

The state will have a copy of the w2 also. It is nice when all things line up as they should. The worst case scenario would be the state sends a letter saying you did not report the income and you reply saying that you did and where it shows on the return.

@John-1955

Re: NonQualified Deferred Comp taxed twice -MA return

John-1955 — Wed, 22 Feb 2023 00:10:42 GMT

So to avoid audit/questions from Massachusetts, would it be better to do disregard TT and just do a paper filing? I can manually adjust to report Deferred Comp as W-2 Income and delete the Schedule X. This would then align with MA reporting requirements and reduce the risk of audit. But sort of deletes the purpose of using TurboTax in the first place.

Re: NonQualified Deferred Comp taxed twice -MA return

John-1955 — Sun, 26 Feb 2023 15:50:16 GMT

I just tried filing my MA return using TT Online and my filing was rejected. I got a reply from TT indicating there is a known problem with NQ Def Comp in MA and they are working on a fix. The fix for MA is scheduled to be completed on March 9, 2023 and TT recommended I check back after the fix and attempt to refile my MA return.