What is a 414 (h)?

[AmyC]

The W2 box 14 is informational and can relate to state taxes. It is not taxable to NY and "other" is a good category. It sounds like you have this figured out and are able to file now. @MGClark

NJ will give credit for double taxed NY income. You get credit for the lower state tax on the lowest taxable amount.

• Each state calculates taxable income differently. 
• Each state has its own tax rate/ system.
• You get the lowest of both categories as a tax credit.

@mmccluskey1   

[MGClark]

This isn't a question of something that is taxed in NY that I can get credit on my NJ return.  This is not NY source income and therefore shouldn't be taxed in NY in the first place.  The instructions for the applicable line on the NY non resident form, IT-203 say:

Line 21: Public employees 414(h) retirement contributions

Are you a public employee of New York State or its local governments?

• If No, go to line 22.

End Quote

Since it's NOT from New York State or its local governments, my wife's New Jersey 414(h) should not be added back on this line.  The amount is not taxable in New York.  The issue on this thread is that TurboTax makes it very difficult to file electronically in this situation.  

[IsabellaG]

I do not see any  NY e-filing issues when I enter a W-2 from a spouse with a NJ 414(h) entry in box 14 of a W-2, as long as I show it as "Other/not classified)" as the category, which is how it should be entered.

[MGClark]

Just 414(h) was in the box when I downloaded my wife's W-2.  That prevented me from picking "other" and blocked e-filing if I picked Tax Exempt.  As I mentioned in a previous post, my work around was to add "Other" after the 414 (h) caption.  That allowed me to pick "Other/non classified" and e-file.  If you're able to e-file with an "NJ" in front it seems anything added before or after "414(h)" seems to prevent the problem.

[IsabellaG]

Oh, I see that this was because of importing the W-2. Another solution (which I would recommend) is to delete the import, and instead enter the W-2 by hand. But I'm glad your solution worked for you.