Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Returning Member
posted Mar 25, 2024 9:02:45 AM

California state wages are lower than federal wages - but all my wages were generated in California

Box 16, California State Wage, is lower than Box 1, Federal Wage.

However, the federal wage is used to calculate my California tax - as part of AGI

Is there a place where I can subtract the "excess" federal wage?

Full-time California resident; no wages were generated outside of California.

No health benefits for a domestic partner of whatever.

0 4 2520
4 Replies
Level 10
Mar 25, 2024 9:06:05 AM

@perplexed4 

Why are the wages reported in Box 1 Federal Wages different than Box 16 State Wages?

The amount in Box 16 state wages and Box 1 federal wages are usually the same.  However, CA wages in Box 16 may differ from Box 1 federal wages for the following reasons: 

  • Wages earned in another state. 
  • Medical expenses.  CA allows an exclusion from gross income for certain employer-provided benefits for a taxpayer's registered domestic partner and that partner's dependents.  
  • California does not conform to federal law regarding health savings accounts (HSAs). 
  • CA taxpayers cannot deduct contributions to federal HSA from their California Wages.   It is not excluded as income and is added to the taxpayers CA wages. 
  • Ridesharing benefits
  • Sick pay under FICA
  • Clergy Housing Exclusion 
  • Income is exempt by U.S. treaties (applies to the employees from the country that has treaty with the US). 
  • California and New York do not conform to the federal suspension of exclusion from income for qualified moving expense reimbursements under the 2017 federal tax law, HR.1, Pub. L. 115-97.  CA and New York allow exclusion from income for qualified moving expense reimbursements.

Returning Member
Mar 25, 2024 9:17:19 AM

NONE OF THESE APPLY

Wages earned in another state.DOES NOT APPLY

Medical expenses.  CA allows an exclusion from gross income for certain employer-provided benefits for a taxpayer's registered domestic partner and that partner's dependents. DOES NOT APPLY

California does not conform to federal law regarding health savings accounts (HSAs). CA taxpayers cannot deduct contributions to federal HSA from their California Wages.  It is not excluded as income and is added to the taxpayers CA wages. DOES NOT APPLY - ALSO CA iS LOWER THAN FEDERAL

Ridesharing benefits DOES NOT APPLY

Sick pay under FICA DOES NOT APPLY

Clergy Housing Exclusion DOES NOT APPLY

Income is exempt by U.S. treaties (applies to the employees from the country that has treaty with the US). DOES NOT APPLY

California and New York do not conform to the federal suspension of exclusion from income for qualified moving expense reimbursements under the 2017 federal tax law, HR.1, Pub. L. 115-97. CA and New York allow exclusion from income for qualified moving expense reimbursements. DOES NOT APPLY

Level 15
Mar 25, 2024 9:31:05 AM

Ask your employer why the state wages is different.  Don't know how to indicate that in the state return.  Switch to Forms Mode and look at CA return Schedule CA (540) and see if anything is subtracted from federal.  

Returning Member
Mar 25, 2024 12:53:33 PM

Nope. Nothing is subtracted on form CA 540. Checking with employer.