What to do if my state wages total more than my total wages

[bryanprior]

NY State requires that my state taxes are the same as my total wages in box 1 of my W-2. Given I earned ~$15k outside of New York it seems like I'm being double taxed on that $15k. How can I prevent from being double taxed by state?

[JamesG1]

Are you a resident of New York state or some other state?  

Do you have one W-2 or more than one W-2?  

Does the W-2 report New York income and taxes withheld and another state income and taxes withheld?  

Please clarify.

[bryanprior]

I'm a NY state resident and was only a NY state resident for all of 2023.

I don't know. I only have one W-2 form that I received from my company with several documents within it, I don't know what constitutes multiple W-2s.

My W-2 has state income wages reported in 4-5 states, NY being one of them. The others are states being ones I traveled to for work for 1-4 days.

[ThomasM125]

Your New York wages should match your federal wages reported in box 1 of your W-2 form. New York taxes all of your income earned in and out of state. Once the tax is calculated, it is reduced by a percent of the income earned out of state, so you don't get double taxed. So, if your New York wages are less that your federal wages, you will need to modify that entry to make them agree.

[bryanprior]

@ThomasM125 - Thank you. I must not be understanding your response because I'm hearing two different things:

To clarify, my New York wages match my federal wages in box 1. What do I need to do while filing to ensure I don't get double taxed? i.e., what do I need to do to ensure " Once the tax is calculated, it is reduced by a percent of the income earned out of state, so you don't get double taxed." As is, my state wages are ~$15,500 more than my wages in box 1.  Should I alter NY State income earned on my NY state filing? 

[RobertB4444]

You said two different things there.  You said your New York wages matched the wages in box 1 and then you said that your New York wages are more.  They need to be the same.

The other state wages are where you have a problem.  You need to file non-resident returns for those states.  If you pay any tax in those states then you will be able to deduct that tax in New York.  That's how you avoid the taxation by more than one state.

@bryanprior 

[ThomasM125]

When you go through your New York return, you will see a screen that references New York Income Allocation:

This screen shot is for a non-resident of New York, but you will see a similar one if you are a resident and earned income in other states.

When you answer "yes" to the question regarding income being earned in states in addition to New York, you will be asked to enter the New York portion of the income reported on your federal return. Those numbers will establish the percentage to use to adjust your tax to the correct amount for New York.

[bryanprior]

@RobertB4444 , @ThomasM125 - 

Box 1 (federal wages) and NY state wages are identical. What I'm saying is my total state wages - NY + 3-4 other states totals $15k more than box 1 (federal wages).  

What do I need to do in filing to ensure I avoid double taxation here? How do I "deduct that tax [in other states] in New York"?

[AmyC]

Let's do an example based on what I believe you are saying. On your w2, box 1 $100k, box 15 for NY $100k, state A, $5k. State B $6k, state C $4k

This is causing an extra $15k of income to show on your resident state.

If this is the case, you need to return to the Federal Income section and edit the w2.  Remember, the federal and state have already received your w2. This is where we explain things to the program to get the forms right.

Change the NY income to $15k less, in our example, it would be $85k for NY. 

This allows NY program to grab all state income and put it on NY return.

[bryanprior]

@AmyC - Can you please confirm that's the case.  My understanding from my payroll is as follows, which contradicts that guidance:

Due to a unique rule in NY state for reporting wages, compensation sourced to NY state may appear to be overstated on the Form W-2.  The state of NY requires the amount reported in Box 16 to match Box 1.  For ease of reference, below are excerpts from pages 55-56 of NY state guidance on reporting wages and this unique rule.  For additional details, please go to NY state guidance on this point at https://www.tax.ny.gov/pdf/publications/withholding/nys50_1223.pdf.  This guidance provides information on how to allocate the amounts that are reported to NY state.   

[AmyC]

I completely agree and your w2 was issued following those rules. That is correct. You are not issuing a w2, you are filling out your tax return using this program.