Missing W2 (and state wages)

[PJackson]

I live in NJ but work for a company based in NYC. As a NJ commuter into NY, I typically receive W2s and file state tax returns in both states.

The original company I was working for was acquired by another company in April 2020, and it seems something got lost in the transition where NJ state tax was not withheld from my time with the new company.

And as a result, I've received W2s for both NJ and NY from the old company for the portion of the year we were with them, but received only a NY W2 and NOT a NJ W2 for the portion of the year we have been with the new company.

I had reached out and got in touch with the director of payroll for my company who said they will not be able to issue a W2 for NJ since no tax was withheld.

When filing for states, I typically file the NY return first, and then when filing for NJ, I'm given a credit for all taxes already applied to NY (to avoid double taxing commuters) and pay whatever resulting difference is left, since State Wages (Box 16) for NJ are typically a little higher than in NY (last year +$1,300 higher).

And so without a W2 for NJ from the new company, I'm not sure how to move forward with the NJ return since I do not know the amount that would be entered as State Wages (Box 16) since it differs from NY.

Hoping you can please advise how I should handle the situation.

[ThomasM125]

I ran your scenario through TurboTax and discovered that New Jersey is going to pick up all the federal income and treat it as income taxable in New Jersey. So, New Jersey will pick up the bulk of your wages, accept for items that are excluded from federal wages, such as 125 medical insurance benefits and FSA contributions. These items must be included in your New Jersey income, so you will have to enter those things separately.

There is a screen in your New Jersey program that references "other wage adjustments - W-2" where you can add the income items that are taxable in New Jersey but not included in wages as reported on your W-2 form, in box 1. You may see these items referenced in box 14 on your W-2 form. I suggest you look at your W-2 form from 2019 and see what was added to your New Jersey state wages in box 16 as a guide to what you should add in 2020.

It would pose a problem on your New York return if you worked in New Jersey and New York, but it sounds like that is not the case. It seems that you just work in New York, and if so all of your income would be taxable to New York.

So, it seems you can enter the W-2's and the adjustments mentioned and then complete the credit for taxes paid to another state on your New Jersey return and your tax in both states should be properly stated. 

[Edited 4/7/21 12:18 PM PST]

@PJackson

[rjs]

New Jersey wages are higher than federal and New York wages because of deductions that are pre-tax for federal but taxable in New Jersey. Some examples of such deductions are Section 125 "cafeteria plan" medical insurance premiums, contributions to a retirement plan other than a 401(k), and FSA contributions. (New York wages are always the same as federal.) These amounts have to be included in the wages on your New Jersey tax return. If your New Jersey wages are not shown on your W-2, you have to enter the additional amounts in the New Jersey interview in TurboTax.

Enter your W-2 in TurboTax just as it appears on the W-2 that you got from the new employer, without a NJ line in the state section. When you get to your New Jersey return, near the beginning of the New Jersey interview you will come to a screen called "Other Wage Adjustments - W-2." That's where you enter the additional items that have to be included in New Jersey wages. You should be able to find the amounts for these items in the year-to-date section of your final pay stub for the year. If you need help identifying them, your payroll department should be able to help.