I had W2s from MA and RI since I live in MA and work in RI most of the year. These each show an amount in box 16 for State wages. When going through TurboTax the RI process goes smoothly and uses the correct box 16 amount. When going through the MA process, the amounts in Box 16 from both W2s are added together in determining the total MA income. I believe the Box 16 from only the MA W2 should be used for this calculation? Is there any way to manually change this?
If you are saying the one W2 showed MA wages in box 16 and the other W2 was from a different employer and showed Wages in Box 16 for the amounts earned only in RI, then what you are seeing is correct.
All of your income from all states/sources will be taxable in the state in which you are a resident. (Your MA, as well as RI wages, are taxable in MA.)
Only your RI wages (or a calculation based on the percent of total wages they represent) will be taxable in RI.
TurboTax recommends that you prepare your RI tax return first, then your MA return, as the MA return will calculate a credit for taxes paid to RI.
I have a similar question regarding Massachusetts and double counting. I worked for one company, but some of the work was done in MA and the rest was in DE.
On my W2 I have two state copies, one for MA and one for DE. The one for MA shows my total earnings as reported on my federal return, and the DE one shows just what I earned in DE.
In TurboTax, these are listed as a single W2 with multiple entries for lines 15-18. When I file my MA return the software is combining the MA and DE totals to a total larger than my entire earnings, and calculating my tax on that number.
It seems that it should be calculating tax on my federal earnings for MA, and then subtracting what I worked in DE.
If you live in MA, 100% of your income is taxed in MA. Down on line 30 you will see Income tax due to another state or jurisdiction. This is where the adjustment is made for taxes paid to another state.
Thanks - but my question is should TurboTax be calculating on 100% or 150% of my total income, assuming 50% of my income is from out of state?
Example: 100K total income on my federal form
MA = 100K
DE = 50K
TurboTax is calculating my MA tax at 150k x 5.05%
Massachusetts generally will tax on all income, apply the tax rate, and then determine the ratio of Mass income/total income. Once the ration has been determined, then it is multiplied by the tax liability generated from all income. In this case, ($150,000)(5.05%)(100/150)= $5050
This is just an example on how Massachusetts tax income when some of it is from out of state.
Thank you - but that sounds like MA is taxing me on $150k even though I only made $100k total working in MA and DE.
So MA does tax on income that you didn't earn. Based on that premise, I can assume that if I didn't work anywhere in 2020 and made zero dollars and filed federal taxes of $0 earnings, MA will tax me on $50k of income.
Massachusetts has a progressive tax system which means that the more you make the more you pay in tax. To determine your TAX RATE, the total o=income is used. That TAX RATE (%) is applied to your Massachusetts income only.
Thanks to everyone for responding - I don't want to sound ungrateful but I already understood what everyone is saying, and those answers don't address or answer the question I was asking.
Fortunately other software besides TurboTax was able to answer the question and I have posted a link to what was suggested on their thread in case anyone is interested in not letting TurboTax incorrectly calculate their state taxes.
It looks like my earlier post was deleted so I'm reposting. Here is the answer to the question that I have been asking but has not been answered by anyone on this TurboTax thread.
"
The Massachusetts Department of Revenue informs us that this W-2 is compiled in error, and the correct course of action is to request a corrected W-2 showing only the amounts in Box 16 attributable to the state in which they are earned, not each state for which the wages are taxable.
If the employer will not issue a corrected Form W-2, there are a couple options available to complete your tax return reporting the correct amount of wages that are taxable to Massachusetts. "
Hi @dngraham37 , so using your example you basically just cut the MA down to $50k?
I’m having the same problem but I n my case 100% of the income was earned in RI. So I should zero the income showed in box 16 for MA.
Am I getting this right? Thanks for your help.
Your resident state taxes all income but gives a credit for income taxed by another state. MA will automatically add all W2 state money together to be taxed. The employers have already sent the states a copy of your w2 information. The states know what you have earned. The program is where you correct the w2 information to reflect your situation.
If all of your income was earned in RI, only enter RI and income on the W2 screen.
If part was MA and part RI, enter both states and the amount earned in each state. Your w2 state section in the program does not have to match your w2. It should match real life.
Please carefully follow these directions.
You will need to prepare the states in a special order. You may need to delete both states and begin again.
It isn't possible for the program to create a credit before it knows the liability. Your returns may be wrong if you do not prepare the states in this order.
If either state questions you, show them the other state return and that all income was taxed. Most states talk to each other over these situations so you probably won't have any communication.
Thx for your reply. I’ll change state income to $0 and only leave taxes paid. Hope that helps but will circle back if it doesn’t.
Worked for me. Thanks @AmyC
For folks out there having the same problem here is a quick recap:
Work in RI and live in MA. 100% of my income is made in RI but my W2 reports State Wages for both RI and MA, therefor when I was doing the MA state return it double counts my income. Tried multiple options suggested in the forum and the only thing that worked was changing the MA State Wages in Box 16 to $0.
This is correct because RI shows all my income which was made there. If you had income in another state and have this problem, you will need to edit box 16 for all states, making sure that sum is correct.
With this I was able to e-file. If you let Turbotax grab only the MA portion of the W2 instead of manually editing your W2, you won't be able to e-file your State Return.
Final caveat, make sure your box 16 is $0 and not blank or it will create issues with your Federal Return.
Cheers!
I am having the same issue. I live in MA and work in RI and i received two W2 from my employer one for each state but the wages in box 16 for each state is same (equal to my total wages) which is essentially doubling my total income. My employer have deducted taxes based on RI.
I see you put $0 for MA income so did it create any issue for you later or everything went on smoothly?
Also, since you live in MA, taxes needs to be paid to MA so how MA will collect those taxes from RI?
Yes, if the wages for RI and MA are the exact same in Box 16, you can enter the MA wages as $0. You will still want to enter any Massachusetts tax withheld. Since MA is your resident state, it will still tax this income even though you are now marking it as earned in RI. RI gets the first crack at this income since it was sourced in their state. MA will provide a credit for the taxes you paid to RI and then tax you on the same income. If MA has a lower tax rate, then you will not have to pay any additional tax on this income. If the MA rate is higher you will have to pay MA more taxes because the credit will not be enough to cover it.
MA will not collect the taxes from RI. Some states have reciprocity agreements where they agree with each other that the nonresident state will not withhold taxes for an employee working in their state and will instead withhold taxes for the state in which the employee resides. MA and RI have no such agreement.
My situation is little more different since i worked with two employer this year, so just want to be clear.
I have lived in MA for the whole year.
Employer 1 - (Live and work both in MA, employer withheld taxes only for MA)
My state wages(Box 16) and total wages (Box 1) is equal which makes sense since that whole
money was earned in MA. I got one W2 from this employer - Say this wage is X (same amt in box1 and box16)
Employer 2 - RI (Live in MA but work in RI, the employer witheld taxes in RI and some amount of tax for MA)
I got two W2, one for each state. My total wage Box1 is Y. On each W2 (MA and RI) the state wage is also Y, so state wages for
this employer becomes 2Y in turbo tax.
So this effectively makes my total state wages for the whole year to be X+2Y which is incorrect. since it should be X+Y
So if i understand clearly, when TT is imporing info from my W2 for Employer 2, i should correct the amount in Box16 for MA to $0?
Note : I am pretty sure total income X+2Y is incorrect since if i use that much income my MA refund comes to be like $20 and if I correct
the MA income to $0 for Employer 2, i am getting much better refund.
I asked my employer and they said that W2 is correct since MA does not have reciprocity agreement with RI so i am concered if its ok to
put MA income as $0 for Employer2?
Yes, it is okay to put in $0 for your second employer as MA wages as long as both states have the exact same amount in Box 16. The wages should be sourced to RI since that is where the work was done, assuming you were not a telecommuter and you worked in RI. MA will still tax it as your resident state and give you a credit for the tax already paid to RI, but if you have the wages sourced to both states, you will be double-counting the income for MA as you said.
I live in MA but work in VT. I received two W-2's from my employer and the W-2 for VT only has the wages and state tax boxes filled in. The federal, social security, medicare, etc.. boxes are filled in on the MA W-2. Do I enter $0 for wages for MA or for VT?
Enter $0 for wages in Box 16 for MA as long as both states have the same amount reported in Box 16. If MA withheld any taxes in Box 17, you will still want to enter those.
Thank you for this detailed response. I am having this issue for 2021 and called Turbo Tax and the called was dropped. Of course, they did not call me back. Before reading this, I had put $0 in state wages instead of leaving it blank and just tried to e-file the MA and RI returns and it worked.
Many thanks.
Hey glad to hear it helped. I didn’t see this till now and actually replied your first post 😊
Thank you and a question...if you are a MA resident and work the majority of the year in MA, yet work 11% (25 of 227 work days) in NY and have different W2 Box 16 amounts? Do I use box 16 of my MA W2 to adjust the amount of Turbo Tax W2 program income, or box 16 of my NY W2 to adjust the amount of Turbo Tax program income? Thank you for any help!
You will be completing two state tax returns. A residential state tax return (MA) and a nonresidential state tax return (NY). TurboTax will determine the credit due on your residential state tax return for taxes paid in your nonresidential state.
Enter your forms W-2 as they are shown.
When entering your state tax returns, when multiple states are involved, you should enter your nonresidential state tax return first (NY).
Then enter your residential state tax return (MA).
It is recommended to prepare the nonresident state first, because your resident state will provide you a credit for the tax you pay to the nonresident state. By preparing the nonresident state first, TurboTax can transfer the credit information to your resident state to return.
Click here for additional information on filing multiple state returns.
Click here for information regarding filing multiple states returns.
Click here for how to delete your state return in TurboTax desktop.
Click here for how to delete your state tax return in TurboTax Online