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ue1
Level 3

State and local income taxes withheld from your wages

Where and how do I deduct California state income taxes withheld from my wages, on my federal return?

 

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4 Replies
JotikaT2
Employee Tax Expert

State and local income taxes withheld from your wages

You will enter your state wages and income taxes withheld exactly as they are reported on his W-2 Form in the Federal interview section of the program.  

 

To enter or edit your W-2 information, go to the Federal section of the program. 

  1. Select Income & Expenses
  2. Select Job (W-2)
  3. Click Edit/Add to the right of the Job (W-2) 
  4. Proceed to enter your information as prompted
  5. When you get to the state input section in boxes 15-17, you will enter your state wages and withholdings as shown in the example below:

State input

 

If you have state wages in more than one state, you would select +Add another state to enter the information for the other states as reported on your W-2 form.  This input will pull into your state return.

 

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State and local income taxes withheld from your wages

State taxes paid will be a federal itemized deduction on schedule A.  But most people don't itemize anymore since the Standard Deduction has increased.  And Taxes paid have been limited to 10,000.

 

There is a max 10,000 limit (5,000 MFS) of property tax and state taxes "SALT". SALT is State And Local Tax. Which includes property tax, any state tax paid like for last year’s return and includes any state withholding from your W2s and any 1099s you have. And any taxes in W2 box 14 and 19 like SDI or VDI. You can only deduct up to 10,000 (5,000 MFS) for SALT State and Local Taxes.

 

For 2020 the standard deduction amounts are:

Single 12,400 + 1,650 for 65 and over or blind (14,050)

HOH 18,650 + 1,650 for 65 and over or blind

Joint 24,800 + 1,300 for each 65 and over or blind

Married filing Separate 12,400 + 1,300 for 65 and over or blind

wahoopeanuts
Returning Member

State and local income taxes withheld from your wages

Do I need to file state income tax with the other states listed?

DaveF1006
Expert Alumni

State and local income taxes withheld from your wages

To clarify, what do you mean by the other states listed? Are you talking about listed on W2 or what?

 

@wahoopeanuts 

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