There is a form error in TurboTax Premier 2023 desktop version on Form W-2. The amount in Box 11 Non-qualified plans is correct and matches the amount in Box 11 distributions from Section 457, but the error states the amount in the State Allocation (11b) does not match. The state ID (11a) is correct and the amount is the same as the other two amounts in box 11. All three amounts were automatically posted on the form when I entered the W-2 information through EasyStep.
The W-2 includes both non-statutory stock plan and non-qualified plan income.
The extra fields in Box 11 for the Sec. 457 and non-qualified plans State Allocation were not included in last year's TurboTax Premier desktop version for Macs.
If you are still getting an error, it would be helpful to have a TurboTax ".tax2023" file that is experiencing this issue.
You can send us a “diagnostic” file that has your “numbers” but not your personal information.
If you would like to do this, here are the instructions: Go to the black panel on the left side of your program and select Tax Tools.
Then select Tools below Tax Tools.
A window will pop up that says Tools Center.
On this screen, select Share my file with Agent.
You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number.
Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.
Here are the instructions if you are using TurboTax CD/Download:
Click on Online in the top left menu of TurboTax CD/Download for Windows
Select 'Send Tax File to Agent'
Write down or send an image of your token number then place it in this issue.
We can then review your exact scenario for a solution.
Please also tell us any states included in the return.
We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.
I am using the desktop version, so there is no tools menu on the left. I am attaching a photo of box 11. Here is the error message at the bottom of the form:
"From W-2 (xxx): Nonqualified Distribution (State Amount) - The total amount of Sect. 457 state distributions does not match with the amount of Sect. 457 distributions reported on the federal return. Adjust the state entries as need."
As I wrote in the original posting, TurboTax automatically populated the fields in box 11. You will see in the photo the amounts match.
Re: diagnostic file,
Leticia gave you the instructions for how to do this for the desktop version of the product:
"Here are the instructions if you are using TurboTax CD/Download:
We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution."
When you create the diagnostic file, be sure to post a response in this thread and include "@" "LeticiaF1" (without the quotes or the space in between) so that she will be notified.
I am not using Windows. I am on an iMac using macOS Ventura Version 13.6.3.
After some additional testing, I'm pretty sure I have determined what is causing the error. After entering the W-2 through EasyStep, on Form W-2 in Box 1, I have an amount that ends in 55 cents. That total amount gets divided into two amounts: Box 3 contains an amount that ends in 70 cents and Box 11 contains an amount the ends in 85 cents. When it transfers the amount in Box 3 to Form 1040 line 1a, the amount is rounded up. When it transfers the amount in Box 11 to Schedule 1 line 8t, it rounds that amount up as well. If I go back to Form W-2 and round up both the second amount (Distributions from sect. 457 and nonqualified plans) and third amount ((cont) Sect. 457 and nonqualified plans State Allocation) in Box 11, the error goes away even though these amounts no longer match the unrounded amount in the first field of Box 11 (Nonqualified plans).
I suspect there is a rounding issue somewhere in the software.
There is a separate ongoing discussion about this issue, titled "W-2 Box 11 Glitch?" by JCC457 which can be found by clicking on the "W2" button. (Not sure why Willy52's post does not show up there.) In that thread over a half-dozen users across as many states have reported this same issue.
Willy52, your "rounding error" solution gave me some encouragement, but alas when I tried entering only round numbers (no cents) I still get the error message.
BillM223, in that thread you said you were attempting to reproduce this problem. Any progress yet?
Once I entered the rounded amount of Form W-2 Box 11 into the second field, TurboTax automatically updated the the State Allocation amount to the same amount and showed no error. In fact, I can put any whole dollar amount in the second field and TurboTax will match that amount in the third field of Box 11 with no error. It seems that should be incorrect. If I add any amount in those two boxes with cents included, I get an error.
The situation you described regarding an error flagging state distributions from a 457 account is a known customer experience that is being addressed by the TurboTax development team. It is expected to be resolved after 2/2/2024.
The update I applied this morning to my Mac desktop version of Premier appears to have corrected the software error. I was able to enter all three amounts in W-s Box 11 with cents included without encountering an error.
I am having a somewhat related issue. I have been using TurboTax for many years and this is the first year that I am receiving an error message regarding a W-2 for monthly payments received from a nonqualified pension plan. The W-2 contains exactly the same information for 2023 as in past years. The payments are taxable for Federal purposes, but not for Pennsylvania (where I reside). The W-2 contains "PA" and the employer number in Box 15, and $0.00 in both Boxes 16 and 17.
I am receiving a Smart Check error message stating:
"Form W-2 (XYZ Corp.): Nonqualified Distribution (State ID) does not match with any states entered in Box 15.
Nonqualified Dist (St ID) PA"
I have tried not entering anything in boxes 15 - 17 in TurboTax; entering information in box 15 but leaving boxes 16 and 17 empty; and entering the information in all 3 boxes (15 - 17) in TurboTax. The error message was received under all 3 of these approaches.
Thoughts on how to address this error message?
I am having a somewhat related issue. I have been using TurboTax for many years and this is the first year that I am receiving an error message regarding a W-2 for monthly payments received from a nonqualified pension plan. The W-2 contains exactly the same information for 2023 as in past years. The payments are taxable for Federal purposes, but not for Pennsylvania (where I reside). The W-2 contains "PA" and the employer number in Box 15, and $0.00 in both Boxes 16 and 17.
I am receiving a Smart Check error message stating:
"Form W-2 (XYZ Corp.): Nonqualified Distribution (State ID) does not match with any states entered in Box 15.
Nonqualified Dist (St ID) PA"
I have tried not entering anything in boxes 15 - 17 in TurboTax; entering information in box 15 but leaving boxes 16 and 17 empty; and entering the information in all 3 boxes (15 - 17) in TurboTax. The error message was received under all 3 of these approaches.
Is this issue also being addressed by TurboTax?
From your description (assuming it says Nonqualified Dist not Diet), it appears that the error may have to do with the fact that you have a State ID and employer ID on the W-2, but no state wages or state tax withheld, or that the format of the State ID is not as expected for that State. If you see the error in Review, the program will normally provide a screen with the error highlighted and ask for an action to correct it.
You might also try going back to the W-2 interview to see whether the answer to a particular question about the W-2 caused the error, or if the State employer ID number was entered correctly. In the alternative, if there are no state wages or stage withholding, try deleting the Box 15 entries altogether, or deleting the entire W-2 and reentering it without Box 15.
Yes, it says Nonqualified Dist.
I am using the desktop version of TurboTax (for a Mac), and I enter my information using EasyStep.
The W-2 information is exactly the same this year as in past years, with the employer ID info being the same.
As to the error, it only appears during the Review process. As to the highlighted item requiring correction, it shows the "PA" in the shaded box (with the wording preceding it being the wording I noted in quotation marks in my message).
I have gone through the interview process a number of times. The only unusual thing I have noted is that TT requires me to enter a state and an amount when I select that I took the money out of my nonqualified plan, even though for PA purposes there is no taxable distribution. I have been entering "Pennsylvania" via the dropdown box, and the full distribution shown in Box 1 of the W-2.
The employer ID has been entered correctly.
As noted in my original message, I have tried excluding any information from boxes 15-17, and other versions thereof; but the error message continues. I have also tried re-entering the W-2, but with no success.
I wonder whether the issue is somehow related to the dropdown in TT showing Pennsylvania, while the box 15 info uses the abbreviation PA? If so, I don't know how to correct this.
Did you try deleting the Box 15 entries altogether, or deleting the entire W-2 and reentering it without Box 15?
I tried replicating this (on a Mac) and did get similar errors, but it allowed me to continue on to the File section.
Some review errors that don't prevent e-filing do allow you to continue. If you are otherwise ready to file, try continuing without addressing this error.
I hesitate to not include the Box 15 information in TurboTax since there is in fact information shown on my W-2 for boxes 15 - 17, with boxes 16 and 17 being "$0.00", and not blank. I have included this information in all of my TurboTax completions in past years.
When you say that you replicated this on a Mac and got similar errors, what did you replicate exactly? Did you include information in boxes 15 - 17 and receive the errors, or are you saying that you left boxes 15 - 17 blank (with info being included as to taking a distribution from the plan, and including a state ID of PA and an amount in the sub-sections of Box 11, OR maybe some other approach(es)?
And did your replication provide for the income/distribution to be included in Line 1 or 8 of the return? It is my understanding from some posts in the past year or so that the IRS made a change for last year's reporting (2022) such that this type of income is now to be reported on Line 8, Additional Income.
I also hesitate to try and file a return that has review errors. TurboTax should frankly not allow this to happen; rather, if there is a programming error, make the necessary programming change. Since you were also able to see the error in your testing, it seems to me it is obviously a programming issue.
Entering 0 does not mean anything to the state, IRS or TurboTax. It is something that frequently causes errors. If you have a state name in box 15, but only 0 in box 16 and 17, then the best thing to do is to leave boxes 15 to 17 blank. Otherwise, the program is looking to generate a form for the state but there is no need for the form.
You are not adding any income or making any subtractions by entering 0. It will not have any type of affect on the numbers on your return or the forms that are PROPERLY generated. If you enter a $0 on some forms it will generate a form that should not be included on your return. This in turn would create other issues with your return.
It is much better to just leave blanks where there are 0's.
Vanessa A and MonikaK1:
I had an opportunity today to delete my W-2 for the non qualified pension payments, and I reentered it without including any information in Boxes 15 - 17. The EasyStep process asks whether I took money out of my nonqualified pension plan. I tried to proceed without answering the question, but it ultimately required me to make a selection. I selected "Yes", and a dropdown box appeared requiring the State to be identified, and the amount. I selected "Pennsylvania" and entered the amount consistent with the amount in Box 1 of the W-2. Smart Check in the Federal section still provides the error message that the State ID does not match with any states entered in Box 15, and notes "PA" in the shaded box as the issue. [I did note that the W-2 income was properly being shown on Line 8 of the Federal return as Additional Income.]
I also noted that the same error surfaces when I perform the overall review that is inclusive of my PA return (the review that occur prior to the filing process).
Additional thoughts on how to address this issue, and actions I should take?
Because this is not an error in anything that affects your tax return, but an issue with the way that particular screen is coded in the program, and I had found that the program allowed me to continue past the final review to the File section ignoring the "error", I recommended that you try proceeding to file.
We have experienced situations like these before, where some anomaly in a screen produces an "error" in Review but there is no incorrect tax information or critical data inconsistency that should affect filing, so the program can continue if you ignore the error.
In the meantime, I am reporting the issue for investigation.
In order for us to troubleshoot this issue, you can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions for TurboTax Desktop for Mac users:
Additional comment: Upon additional review, I believe the issue is really that your employer didn't identify any state wages in Boxes 15-17. The follow-up screen in TurboTax that asks you to confirm whether the amount in Box 11 was a contribution to or a deduction from a nonqualified plan, and to identify the state, is there to ensure the amount is identified and treated correctly.
Distributions from a nonqualified deferred compensation plan that are attributable to elective deferrals are subject to Pennsylvania Personal Income Tax. However, distributions that are attributable to previously taxed elective deferrals are not subject to Pennsylvania Personal Income Tax or employer withholding at the time they are distributed from the plan under the rules outlined below. The cost recovery method is used to account for deferrals that were previously subject to tax. See here for more information.
[Edited 03/27/24| 9:11am PST]
@PADenny : (edited)
MonikaK1:
Consistent with your input, and that of Vanessa A, I left boxes 15 - 17 blank on the W-2 within TT. Although the error message was still being received, I proceeded as you suggested through the Efile process for both Federal and PA. Unfortunately, after entering the required information, including payment of the PA Efiling fee, TT would not allow me to Efile. A message was received stating that "we need a little more information that we didn't get earlier." I selected Continue and the prior error message re the PA entry not matching with any states in Box 15 was shown. The option identified was to paper file. My strong desire is to Efile (and I already paid for it).
The email notice I received from TurboTax Community on 3/27/24 did not include the input from you that is now included in your message as an "Additional comment" (and the format of the input regarding sending a diagnostic file was in a different format (numbered). I did send a diagnostic file and its token # is 1221467.
As to the "PA" noted in the Nonqualified Distribution, I tried to leave that field blank, and also noted that it would only take 2 digits, and not numbers. I found no entry that would eliminate the error message.
As to your Additional comment that I now see:
1) I have been receiving payments under this pension plan for over 7 years, and the reporting on the W-2 by my former employer has been consistent, with no PA tax withheld (and field 15 has had PA and employer number included, but fields 16 and 17 have had "$0").
2) As required by PA, each year I have sent to them a copy of the applicable W-2 and informed them as follows: "A W-2 was received from Vanguard Fiduciary Trust Company that includes wages of $XX,XXX.XX from a pension plan. The plan meets the four characteristics of a "Qualified Plan Program" per Answer ID 433 published 12/03/2002 by the PA Department of Revenue: Therefore not taxable for PA purposes." Another employee from this same company retired in 2022, and also receives payments from the same pension plan. He received an inquiry from PA as to the taxability of this plan, and after providing the exact same input as noted in my quotes, PA accepted the amount as nontaxable. In addition, I have never received any form of notice regarding the amount being taxable, and PA has NOT changed its laws as to such payments.
3) As to the Distributions from the plan: I made no elective deferrals to the plan. It is entirely funded by the company. In addition, since I made NO elective deferrals, there were definitely never any previously taxed elective deferrals.
Hopefully this information, and the diagnostic file assists in bring a solution quickly forward so as to allow me to Efile both the Federal and PA returns before the 4/15/24 deadline.
As additional input, I reached out to an attorney who is also a retiree from the same pension plan, and who is familiar with the plan. He noted that although the W-2 is non-qualified it only is non-qualified for Federal purposes as the Plan did not satisfy the salary hierarchy discrimination test; but it is qualified for PA purposes as it meets the qualification tests. Therefore, it is eligible (no tax) in PA.
Hopefully this situation can be addressed by TurboTax (since 2023 is the first year where this issue has surfaced).
Thank you for sending the diagnostic file and for the additional information.
I reviewed the file and tried several different actions to get rid of the error. The one that worked was to enter PA, the Federal ID number, and the total wages in Boxes 15 and 16. Then, I had to mark the wages as nontaxable on the Pennsylvania return in order to produce the same dollar result you had. This (making "wages" nontaxable for the State) also raised an error but it didn't seem to stop the process from proceeding.
I am elevating this issue for further review.
You are welcome.
As to your input:
1) I am somewhat hesitant to place total wages into Boxes 15 and 16 (I assume you mean 16 and 17) when the actual W-2 sent to the IRS and PA contain "$0" in those fields (as it was in past years, and for which this is the 1st year of any issue).
2) Weird that you would have to enter the Federal ID number in Box 15.
3) How did you mark the wages as nontaxable on the PA return (i.e., what process used)?
4) You mention there was now a different error shown, but it didn't stop the process from proceeding. Do you mean you were actually able to transmit both the Federal and PA returns? [The initial error I have been trying to address allowed me to go through the enter filing process, but ultimately provided an error message that wouldn't allow me to transmit the returns when I hit the "Transmit Returns" button.]
Hopefully your elevation of this issue will provide a prompt/timely solution that doesn't seem to me to be a sort of fooling of the system.