Other Wage Adjustments - W-2

[piffle]

TurboTax is presenting me with the below dialog but does not state how I would know whether to do this. For my W2 entry, I had entered information about 401k contributions from Box 12 code D, and Dependent Care FSA benefits  from Box 10. Are any additional "adjustments" needed here related to these or other items?

[MaryK4]

The other places to look for adjustments on your W-2

Box 12 Code T Adoption Expenses, Box 12 Code W 125 HSA and possibly Box 14 Cafeteria/125 

[piffle]

Hi, thank you for the reply. I have entered all my W2 information into turbotax, so was expecting anything relevant to populate through to the state return. I am asking what more is being asked of me here. If it's asking me to enter W2 info again, why would that be?

If it's looking for something not on the W2, then what is it asking for? (The W2 boxes mentioned are not relevant to my tax situation.)

[BillM223]

The Section 125 contributions, which are not taxable on the federal return, but are taxable in NJ, should have been automatically added back to NJ income, if TurboTax was able to recognize them for what they are. Because box 14 codes are not standardized by the IRS, this may not be possible. On the other hand, since HSA contributions are explicitly entered with a code W in box 12, these are automatically added back to NJ income and seldom need to be added in this table.

So you should add here any Section 125 contributions that TurboTax was unable to add back because they were not identifiable. This means nearly any Box 14 entry that is not deductible in NJ.

Please don't be annoyed at TurboTax about this...as I noted, box 14 codes are not standardized, so TurboTax may not be able to recognize them - that's a flaw in the W-2, not TurboTax.

This may mean that you will have to double check these entries when you are able to see your output forms.

[piffle]

Hi, thanks for the reply. I don't have an HSA, and I don't recall every having an issue with items in box 14 (FLI and UI/WF/SWF), but I'll review the output to confirm.

I do have a dependent care FSA, which is stated in box 10. Is there any reason why I would have to "adjust" anything related to that? Because it's there, box 16 (state wages) should be correct, right?

[MarilynG1]

If you received a salary reduction benefit for your FSA amount in Box 10 (your Box 1 amount would be less than your Box 3 amount, if so), you would add back the FSA amount in Box 10 on this screen.

However, if your W-2 shows your State Wage Amount in Box 16 as the same amount as Box 3, then the FSA has already been added back in for New Jersey, and you wouldn't need to may an entry on this screen.

New Jersey doesn't allow a deduction for your FSA like your Federal return does.

Here's more info on New Jersey Cafeteria Plans.

@piffle 

[piffle]

Hi, I reviewed the PDF output from TurboTax, and it's just using what's in box 16 on my w2 on the tax form (NJ-1040 line 15). The line for box 10 (Form 2441 line 12) has the correct amount from box 10. So it's still unclear what, if anything, I would need to adjust. 

Regarding the w2, I tried all the math I could think of (even trying to add/subtract my health FSA deduction which is not in any box on the w2), but the number in box 16 is still a mystery to me. Is this an HR question?

[BillM223]

1. You do not report anything on your 1040 regarding a health FSA, nor on your NJ return.

2. The number in box 16 should be "state wages", or your box 1 amount (federal wages) with certain non-deductible things in NJ added back in. So it is normal for the Box 16 amount for NJ taxpayers to be larger than the box 1 amount.

I could not open your attachment, but I think you are at a TurboTax screen which is asking you for adjustments to your NJ income.

These would be things that Mary described above, largely Section 125 cafeteria plans.

HOIWEVER, in this context, contributions to your 401(k) plan do not count. That is, alone of most retirement plan contributions, NJ does not tax contributions to 401(k) plans, so you do NOT have to add this back to NJ income. I think this is a relatively recent change; you can read about it here.

Since the HR/payroll people are the ones in charge of populating the numbers on the W-2, asking them about box 16 would be reasonable. At the same time, they might suggest some things to adjust, but it is not clear that you have anything to adjust. Talking to them is always a good idea.

[piffle · Accepted solution]

HR replied with the following: "Box 16 consists of all gross wages (including imputed GTL) minus 401(k) deduction only. Healthcare, FSA, etc. is not deducted for state wages."

I can see that box 16 = box 1 + dependent care FSA (box 10 or $ from yearend paycheck) + health FSA ($ from yearend paycheck) + health insurance premiums ($ from yearend paycheck).

So, for me, there are no "other wage adjustments" that need to be made on this screen. The numbers all tie out.  The health insurance premiums were a key missing link.