The employer address on my W2 is a Canadian address. The zip code has a combination of letters and numbers. Won't let me enter even after selecting Foreign Address box

The workaround is this:

1. Indicate foreign address (as it sounds like you did).
2. Enter the street address, the city, the provincial code (if Canada, otherwise leave blank), and the country
3. Enter “00000” (zeros) for the zip code.

What TurboTax will do is place the city/province/country all on the City Line of the W-2, and because the zip code is not blank, then the return can be e-filed. Other, as you’ve probably noticed, TurboTax won’t let you e-file without a standard 5 or 9 digit US zip code. 

Don’t worry about the IRS, this has been TurboTax’s workaround for years, so the IRS must be quite accustomed to it.

NOTE: if TurboTax was able to “import” your W-2 because it recognized the company’s EIN, then you won’t be able to do this, because even if you say, “Skip the Import”, it will import the state and zip code anyway (in my test cases, anyway). In that case, I suggest you just let TurboTax use the imported address (which will probably be a US address) and not worry about the address mismatch. The critical thing is the EIN and the first few letters in the company name.

What do I enter for the state?

You won't enter a state if it is a foreign address. Select foreign address and enter the information. It is just the zip code that needs to be 00000. I love your username! @sheHuLK