MA State Income is double counted

[melsawy]

Hi. I currently live (all year) in MA but my work and company is based in NY. On my W2 I have the NY box (which I expect ofcourse) with my full income shown in box 16 and tax withheld shown in box 17 (18, 19, 20 blanks). However surprisingly I have a NJ box? The NJ box shows my full income in box 16 with blank boxes for 17,18,19 (keep this in mind for later).

Surprisingly I dont have any MA withheld for the entire year and its only NY. That shouldnt be a problem because ill just file in MA as a resident and NY as a non-resident and they can balance each other out by giving me credits for what I paid in NY.

Data from W2:

box 1: 102975.91, box 2: 16853.16... NY State boxes.. 16: 102975.91, 17: 5197.83... NJ State boxes.. 16: 103415.05

We are filing jointly with my wife. My wife has only a single W-2 with roughly 855 income (in MA) and fellowship money that im including as misc income (roughly 50,000). Both earned in MA. She didnt withhold anything on the fellowship money, so we will pay that and her only withholding is roughly 42$ on the W-2.

The problem:

1. I started with federal and all went well. Total income roughly 157k, taxes I paid 17k, so I owe roughly 1,600$.
2. Then I filed NY as a non-resident with my full income from work and have a refund of $128.
3. Now I am filing MA, and it flags my income as 258k. I dont think this is correct right? Looks like its adding the income from NY (correct) + NJ (no reason why its on my W2 with empty 17-20 boxes) + my wifes income (correct). 103k (NY) + 103k + 50k = 250kish. This is not correct right, it should only be 103k + 50kish from my wife = 150kish.

Please confirm. I am not sure how to fix it on turobox side. There is a step where it is asks to transfer only wages identified as earned in Massachusetts from your federal forms W-2. I thought this would fix it but this reduces my taxes to 50Kish.. which means it doesnt take anything from my income and only my wife. If I dont tick this, it counts my income as 258k and I owe roughly 8k in taxes to MA. If I tick it, my income for MA goes down to 50k and my refund becomes 41$ which also doesnt look correct.

Thank you!

[AmyC]

Follow these steps:

1. Go back into the federal income. 
2. Back to the W2 with the state mess
3. Edit the W2
4. Go to the state section at the bottom of the screen. It is informational and should be corrected for actual life.
5. You only want NY entered there. MA will automatically pull the income since you are a resident. 
   1. Delete MA and 
   2. Delete NJ 

This will solve your income issue. The states received the forms and know what it says. The federal part must remain as is.

[tb3364]

Can you please confirm something for me?

What you are saying is because the W2 lists both states I should only enter the state I worked in for the specific job and NOT MA on the federal form?

Should I then list the entry on the W2 as additional income on the MA form? because the entry on W2 shows withholding from both of the 2 listed states...

So confused...as to how to remedy...MA tax form lists her overall income essentially double what it was reported in the other state. Again, looking at W2...it lists both MA and other state...and the forms are basically treating it like 2 jobs...and skewing actual income made...

PLease clarify for me...running out of time.

[AmyC]

1. The program pulls all income from every state for your resident state return. Therefore, MA state doesn't need to be there. 

2. You don't need to add income to the resident state. For the nonresident state,  you allocate income as a nonresident. The state name does matter to make the allocation.

3. Since you have MA income and tax withheld on your w2. You do want MA listed on the federal entry with the state and the withholding, the income part is the variable. Since the program pulls all state income from the w2 and marks it as resident state income, you need to subtract out the extra and only use MA income for what is left to finish creating the state income for MA. It sounds like MA with zero income plus the tax withheld may be the solution.

I am thinking that filing your federal return and one correct state might be smart. Then save a copy of those. Change the federal entry screens on the w2 and file the rest.

@tb3364