Yes, you'll enter the W2 under the Federal Taxes tab, in the Wages & Income section, just as if it were a W2 for employment. The Nurse Corps LRP payments are taxable, and you probably had some taxes taken out (boxes 2 & 17).
Here's a link to the US Dept of Health & Human Services, Nurse Corps Program Guidance for 2016. Note the tax notice on page 4: https://www.hrsa.gov/loanscholarships/repayment/nursing/guidance.pdf
Why when you enter the W2 form then the individual owes an increased amount of money if this is for loan forgiveness?
@Aokafor0604 You receive a payment from the Nurse Corps to help you with loan payments in exchange for services you provide at health care facilities. So, you are being paid for services, so that is why the payments are taxable.
Yes, it is subject to state taxes. If you worked in the same state that you live in, it will be taxed in that home state.
If you worked in a state other than the one you live in it will be taxed in your work state first, and then be reported in the state that you live in. You will get a credit in your home state for taxes paid in your work state.
Why are my state taxes so high? I live in Louisiana but my W2 says Maryland so I’m subject to Maryland taxes, unless I state that I’m a nonresident which makes my Louisiana taxes $2300. @JohnB5677
Where do you work?
If you work in MD, then you would need to file a Non Resident for MD. Then you can take a credit on your LA resident return for taxes paid to MD.
If you work in one state and live in another, unless those states have reciprocity agreements, you will need to pay taxes to both the non-resident state in which you are working and the resident state where you live. Generally, you can take a credit on your resident return for the taxes paid to the non-resident state.
If not taxes were withheld from your state, then you would have to pay your resident state whatever you owe minus credits if they apply. When you work in one state and live in another, it is a good idea to pay quarterly state taxes if your employer does not withhold for your resident state to avoid penalties. You can also check to see if they will withhold for your resident state.
If you worked remotely and did not physically work in MD, then you would need to file a Non-Resident return for MD claiming $0 for wages and keeping the amount withheld the same. Then you would file your LA return, but you will have to pay the taxes due which sounds like in your case it will be $2,300.
Multiple States