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This is a two-letter state abbreviation (For example:, "NY", "NC") or a specific municipality code. This can be found on your W-2 form in Boxes 18-20. If it is not there, you may find it on your municipal tax return, or by searching your city/county's tax website. It indicates where the local payment was made.
Sometimes if you can't find it, you can enter the city or county name to satisfy this.
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