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mgm4
Returning Member

Which W-2 wages do I use for NY state income tax?

Last year I used TurboTax to pay federal and NY state income taxes and was hit by a penalty by NY state because I didn't report the right wages.  This despite following the TurboTax instructions faithfully and reporting what was listed as State wages on the W-2.  I am trying to avoid that happening this year, but I can't find a way to make TurboTax do anything differently than last year.  I would appreciate any help!

 

My situation:  W-2 Box 1 and Box 16 (state wages) are the same.  There is an amount in Box 12 reflecting how much I paid into an optional retirement plan.  Box 3 (social security wages) is equal to Box1 +  Box 12.  Does NY want me to report and pay taxes on the Box 3 wages instead of what TurboTax is doing (using Box 16)?  This is nowhere in the guided questions or Help.  If so, is there a way to force TurboTax to use the correct wages?

6 Replies
xmasbaby0
Level 15

Which W-2 wages do I use for NY state income tax?

Not sure why you are having a problem.   If you enter your  W-2 exactly as it appears when you prepare your federal return, the information flows to the state return automatically.    You have to enter all of the boxes from your W-2 into your federal return, and let the software do its job.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
mgm4
Returning Member

Which W-2 wages do I use for NY state income tax?

I'm not sure why I am having a problem either.  The W-2 information was entered correctly (I double-checked when I got the penalty letter).  They wanted me to pay income tax on the Box 3 wages, not Box 1 or 16 (state).  Apparently the reduction in wages that the IRS allows for the retirement plan payments is not allowed by NYS?  I have not been able to find that information on their website anywhere or within TurboTax.

BillM223
Expert Alumni

Which W-2 wages do I use for NY state income tax?

What is the code in box 12 for this "optional retirement plan?"

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mgm4
Returning Member

Which W-2 wages do I use for NY state income tax?

The code in Box 12a is E.  The only other Box 12 is 12b, which is DD.

BillM223
Expert Alumni

Which W-2 wages do I use for NY state income tax?

The New York Instructions clearly state (page 17) that "Do not enter contributions to a section 401(k) deferred arrangement, section 403(b) annuity or section 457 deferred compensation plan." I.e., don't add contributions to a 403(b) back to New York state income.

 

Did the State give you a reason for the income adjustment?

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mgm4
Returning Member

Which W-2 wages do I use for NY state income tax?

Thank you for the helpful info!  Now that I read that I am really wondering myself.  They didn't say much more than what I said.  I need to go deeper into it with them.

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