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Returning Member
posted Mar 6, 2021 12:09:49 PM

to check the box or not

I am a bit confused about whether I should check "remove these wages" box or not. My wife works from home, NJ, but technically is paid a wage from a company in Philadelphia, PA. Lines 15-17 are populated with information. 

 

I also am having the same issue but I work in the state that I live. So that is a bit confusing also. 

 

In both cases, the difference in numbers from box 1 and box 16 are different. 

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1 Replies
Expert Alumni
Mar 7, 2021 7:11:55 AM

No, the wages should not be removed from New Jersey (NJ).  As your resident state you are taxed on your worldwide income.

 

The taxable wages can show differently in the state wage box versus the federal wages in Box 1, of the W-2. Both NJ and Pennsylvania (PA) follow certain income tax rules which may be contrary to the federal income tax rules.

  • New Jersey does not allow you to exclude from wages amounts you contribute to deferred compensation and retirement plans, other than 401(k) Plans.
  • Pennsylvania does not allow you to exclude from wages amounts you contribute to deferred compensation and retirement plans including 401(k) Plans.

If for some reason the employer did withhold PA state tax, then a return should be filed with PA, as a reciprocal state. for a full refund of any PA tax withheld. TurboTax will recognize the reciprocal agreement between NJ and PA.