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Box 1 vs 16 on W2

My company doesnt take out my local taxes. Company is in NJ and i work from home in PA.

The HR dept takes forever to respond and i am just making estimated payments to PA myself for 2023.

Now for 2022 local tax, I would use box 16*local tax %, correct? I have nothing in box 18 so i need to use box 16, right?  I have to add PA and NJ box 16s together.

I noticed that box 1 is less than the box 16 total. i have a Roth 401K so shouldnt the box 1 total = box 16 total?

box 1 gets reduced by the 401K contrib amt, but that would be for traditional 401K, right? not Roth.

 

 

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4 Replies
JosephS1
Expert Alumni

Box 1 vs 16 on W2

TurboTax does not support local PA wage reporting.  This must be done manually by you.  Your PA local taxable income usually equates to your Social Security wages but if you have employer paid term life insurance (code C in your box 12 items), the difference between social security and/or medicare wages and your local taxable income for Earned Income Tax (EIT) would be that number.

 

If you participate in your employer's pension arrangement, the Federal wages are normally smaller than your State and Local Wages for PA as PA does not allow deferral for pension plans.  If you are not sure of who your tax collector is for Local Earned Income Tax do a Google Search for your municipality and then look on the PA website's DCED link for identifying your local tax collector.

 

Berkheimer Associates and Keystone Collection Services are 2 of the larger local tax collectors for EIT and Local Services Tax (LST).  The DCED link will also give you your municipality's EIT rate.  Most are 1% of earned income (wages) but a fair amount are higher.

 

@gmott18 

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Box 1 vs 16 on W2

Thanks. Yes, i know my local income tax is 1%. I called Berkheimer and they told me to use box 16 * .01.

Still trying to figure out why box 1 doesnt equal box 16 though. That would make sense if i had a Traditional 401K, but i have a Roth 401K so it would be taxed at Fed and then state level.

Hal_Al
Level 15

Box 1 vs 16 on W2

For the task, at hand, filing Berkheimer, it doesn't matter why  box 16 doesn't match box 1. Just use the box 16 amount as they said. 

 

But as @JosephS1 said, it is not unusual for them not to match. The difference could be any pretax benefit(s) (e.g. health insurance). Your employer may be the only place to get a definitive answer. 

 

In Ohio, the city (local) tax agencies want you to use box 5 (medicare wages), if box 18 is empty. 

Box 1 vs 16 on W2

I dont think it would be medical insurance there. Med and Dental wouldnt be taxed at fed or pa level.

Yes, i think i was told to use box 5 by someone here. But after talking with Berkheimer i was instructed to use box 16, not 5.  Who knows what is making box 16 more than 1.  My research indicated that it would be a pre-tax retirement account, but i only have a Roth 401K so that would be same for both.  If i had a regular 401K that would make sense.  Taxes are weird.. hard to get answers even from experts (due to different states and tax laws and situations) and Google needs work in this area for sure. you ask about how contributions are taxed and Google talks about distributions and then even when i specify tax implications of contributions, Google shows Roth IRA info, not 401K. Oh well, i give up.  No one knows and my HR dept wont know and will take forever to respond. Thanks though. Sometimes you just need to move on and find other issues and headaches.

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