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Level 1
posted Jun 6, 2019 4:37:02 AM

I live in TN and work in KY. Kentucky State Tax reporting on 740 NP. Why is the Kentucky Tax Liablity less than amount reported on W-2?

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1 Best answer
Expert Alumni
Jun 6, 2019 4:37:05 AM

What line number of the 740NP are you asking about? Line 29 (liability) or Line 30 (withholding)?

State tax liability is not reported on a W2. The W2 only shows how much was withheld (Line 30), and the liability can be lower or greater than what is withheld.

Only states with a flat(ish) tax  (like perhaps Pennsylvania) could withhold the exact amount of your liability.

1 Replies
Expert Alumni
Jun 6, 2019 4:37:05 AM

What line number of the 740NP are you asking about? Line 29 (liability) or Line 30 (withholding)?

State tax liability is not reported on a W2. The W2 only shows how much was withheld (Line 30), and the liability can be lower or greater than what is withheld.

Only states with a flat(ish) tax  (like perhaps Pennsylvania) could withhold the exact amount of your liability.