We moved from NJ (Jan-Sep) to CA (Sep-).
In my case the reported W-2 wages for each state subtract the 401k deductions (D-box 12, 401k) from the Gross Wages/Pay.
However in my wife's W2, the sum of box 16 for NJ and CA is actually a few hundred dollars more than the Gross Wages, however the box 1 (total W2 wages) = gross wages - 401k deductions+group term life.
So it appears that her employer didn't subtracts the 401k deductions when paying the state taxes.
Does this look like a mistake?
thank you in advance.
NJ does allow a deduction for contributions to 401(k)s.
NJ does not allow a deduction for contributions to cafeteria plans, HSAs, or retirement accounts that are not 401(k)s.
If your wife has a 403(b), 457, SEP, or basically anything that is not a 401(k), NJ does not give her a deduction for the contribution and her state wages will exceed her federal wages.
Well, this is what's weird is that she has a 401k account
@MikeSuri Then her employer made a mistake and should be informed so that they will fix it going forward. For 2021 you have a choice - you can file an extension and wait for a corrected W2, you can adjust the amount in box 16 to equal the amount in box 1 and hope New Jersey understands or you can file it as is and deal with amending it later when the corrected W2 arrives.