For a NJ W2 gross wage adjustment (I work in NY an...
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Level 1

For a NJ W2 gross wage adjustment (I work in NY and live in NJ) should I add Cafe 125, Medical FSA, and Transportation Reduction items to box 16 that has NY wages?

Does New Jersey Gross Income Tax Act Section 54A:6-23 mean Transportation Reduction is not included in gross wage?
4 Replies
Employee Tax Expert

For a NJ W2 gross wage adjustment (I work in NY and live in NJ) should I add Cafe 125, Medical FSA, and Transportation Reduction items to box 16 that has NY wages?

I do not know if "Transportation Reduction" refers to the same thing as "employer commuter transportation benefits", but if it does (and it probably does), then you are correct that the Section you quote says exactly that: that commuter transportation benefits are not to be included in gross income on the state level in New Jersey.

 

In addition, New Jersey is somewhat unique in that it taxes a number of benefits that are not taxed on the federal level nor in most other states. For example, New Jersey taxes HSA contributions and contributions to all retirement plans except for 401(k)s.

 

The result is that New Jersey state income is often higher than either gross federal income or that of other states.

 

I doubt that you need to add these items to NY income; I assume that your employer has already done that.

 

If you need to clarify this, please come back and ask again.

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Level 1

For a NJ W2 gross wage adjustment (I work in NY and live in NJ) should I add Cafe 125, Medical FSA, and Transportation Reduction items to box 16 that has NY wages?

My NY income is the same as federal. I guess I’d have to add FSA and Cafe 125 to NY income to come up with NJ income.

Employee Tax Expert

For a NJ W2 gross wage adjustment (I work in NY and live in NJ) should I add Cafe 125, Medical FSA, and Transportation Reduction items to box 16 that has NY wages?

Where is this FSA and Cafe 125 reported on your W-2? In Box 14? If so, what are the codes with them?

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Level 1

For a NJ W2 gross wage adjustment (I work in NY and live in NJ) should I add Cafe 125, Medical FSA, and Transportation Reduction items to box 16 that has NY wages?

Box 14 is empty. My employer doesn’t report NJ taxes, but instead only has NY taxes on W2 with a supplemental summary section that shows how gross pay was adjusted, showing FSA, transportation and cafe 125 items.

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