MA state tax double counting income

[Anonymous]

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?

[RaifH]

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. 

[Anonymous]

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?

[RaifH]

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. 

[dylenbentz2369]

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?

[RaifH]

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. 

@dylenbentz2369

[Donna M Boston]

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.

[FrankSTein]

Hey glad to hear it helped. I didn’t see this till now and actually replied your first post 😊

[kb2376]

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!

[LindaS5247]

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

[kb2376]

Hi Linda, Thank you for your response. I think it is different from AmyC's on 3/16/21 (MA state tax double counting income (intuit.com)) and RaifH's on 2/20/22 ((1) MA state tax double counting income - Page 2 (intuit.com)). I am concerned about the program double counting my W2 box 16 income when I complete my MA return. In AmyC's post and RaifH's posts, they suggest you adjust your W2 box 16 state wages to reflect reality, what you actually worked in each state. RaifH made the distinction that adjusting the amounts in W2 box 16 was ok so long as both states have the exact same amount in Box 16. MA (resident) and NY (nonresident) show different box 16 amounts. I understand that MA will give me a credit for taxes paid in NY. I also understand that I have to complete the nonresident state first. Can you please guide me on how I should adjust the box 16 state wages in turbotax if box 16 amounts are different? Thank you!

[LindaS5247]

Do you have one Form W-2, with two box 16 entries?

When you entered your W-2 did you enter both states information?

Has TurboTax doubled your MA state tax income or are you just concerned it will? 

The program should properly determine the apportionment of your income.

I don't generally advise people to change their W-2 entries unless they are incorrect or it is absolutely necessary.  They are cross-checked by the IRS

To find out if your income was doubled on your MA State Tax Return, you can preview your return before e-filing to check these entries, as follows:

You can view your entire return or just your 1040 form before you e-file:

1. Sign in to your TurboTax account
2. Open or continue your return
3. Select Tax Tools from the menu (if you don't see this, select the menu icon in the upper-left corner)
4. With the Tax Tools menu open, you can then:
   • Preview your entire return: Select Print Center and then Print, save or preview this year's return (you may be asked to register or pay first)
   • View only your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu

You can preview your return in the TurboTax CD/Download software by following these steps:

1. With your return open in TurboTax, select Preview from the File menu at the top. (If you don't see "Preview," open your return, not just the program).
2. In the pop-up window, choose the set of forms you wish to see (all official forms, specific forms, etc.) and select Preview.
3. Scroll down to view all the forms if you chose to preview multiple forms.

This way you will know if you income has been doubled, which is of course incorrect.

How do I allocate (split) income for a part-year state return?

Allocation, in this case, means to assign income to the state you were living in when you earned it. We'll either ask you to separate the income you earned or to verify the allocation amounts we already calculated for you.

Allocating your income shouldn’t be too difficult, but it can involve some math. You'll need to determine if the income you're allocating is earned or unearned, as these are handled differently:

• Earned income comes from employment, such as wages, salaries, tips, payment for services, and commissions
• Unearned income comes from non-employment sources, such as interest, dividends, capital gains, social security, and IRA distributions

Click here for additional information on allocating income when working in multiple states.

If this does not help please feel free to come back to TurboTax Community with additional details or questions or click here for information on Turbo Tax Support.  You can connect with a Live TurboTax Agent and share your screen.

[J91022]

Really confused with all these responses.  My W2 has RI and MA income the same (each being my total salary.  I work roughly 50% in RI at my office e and 50% at home/resident state in MA. Say my salary is 100k.  Box 16 has RI 100k and MA 100k.  I started to do my RI return first and it has 200k and is asking how much I want to apportion to RI?  I dont want the total salary to be 200k.  Am I entering 50k here? (Half of 100k?)

[IsabellaG]

I recreated a scenario like yours, with $100,000 in wages, and the same $100K listed on my W-2 for both MA and RI. When I start the RI return, as you said, it shows $200,000 in the box for wages and salaries, but you can see that the instructions say to enter the portion of your o$100.000 in wages and salaries that you earned from Rhode Island sources. 

So while I see how this can be confusing, all you need to do is enter the correct portion of your RI  wages in that box.  Continue through the interview, apportioning the all other income based on the state where it is sourced. The $200,000 that carried over from your W-2 will not be  entered anywhere on your RI or MA returns. You will see the allocation of income on Form RI-1040 NR, Schedule II, Full Year Nonresident Tax Calculation.