What is a 414 (h)?

[creakyshrimp]

I know this is late for this year, and I DO NOT endorse this method. But it worked for me (so far).

I also live/work in NJ but have NY income and the 414(h) issue.

I cutoff the "h" from the box in my W2 and left it as just "414". It had no tax impact, I could e-file everything successfully, and I've received my refunds. If I'm ever audited or whatever, I figure this could easily just be a "typo".

[twolf]

Did your return go through showing the 414H monies as taxable or non-taxable? These contributions are exempt from Federal tax but are not exempt from New York State tax; therefore, the amount must be added to your New York State tax return.

[MGClark]

I am not a NY resident but I had some NY income that required me to file.  The 414H related to my wife who is also not a NY resident and it had nothing to do with NY and is therefore not taxable in NY.  That happens to be my situation.  My problem was that something that had nothing to do with NY was preventing me from filing electronically.

[abeyankee1]

I am surprised that cutting off the H worked...what did you put into the description box? I thought NY had a problem with the description saying Other.

[AmyC]

The 414(h) is reported on your W2 in box 14. When entering the W2, you must enter that income and will be asked to select the dropdown box that matches your situation. The program then knows to carry that to your NY return to be added into income. It is not included in your federal income.

@abeyankee1 

[app1jpk]

Amy C,

My situation is slightly different. I live and work in NYS, however my wife works as a teacher in NJ. Her W2 reflects both a 414h entry and a SEC125 entry along with the corresponding dollar amounts.  Her federal wages are lower than her NJ wages, reflecting these amounts as NOT federally taxable, yet NJ taxable.  Being we live in NY, my question is which category do I select for each of these box 14 entries, NY taxable or NY tax exempt?

[ErnieS0]

Neither if you are asking about your wife's W-2 @app1jpk. Your wife works in NJ so these are not New York 414(h) or SEC 125 entries. Use Other (not classified).

Here are the 414(h) plans reportable to NY: Are public employee 414(h) contributions taxable by New York State?

Your wife's 414(h) and SEC 125s are added into your wife's Box 16 NJ wages as you said.

[arb2]

Hi ErineSO,

I have the same issue: I had some income from NY in 2021 but my wife works in NJ as a teacher and had 414(h) contributions to a NJ pension plan. She did not have any NY income in 2021 and never worked in NY state.

I am trying to use "Other (not classified)" for 414H entry as you have suggested here. But TurboTax is showing a message that I can't efile NY taxes because of this. It is asking me to print and do a paper return.

Any suggestions on how I can efile in this situation?

[MGClark]

ErnieSO, I have the same situation.  I tried selecting the "New York IRC 414(h) NY Exempt Option" even though that didn't seem right but when I did, the program instructed me to put "Not" after 414(h) in the description field of the W-2.  I did that and now am able to file electronically.  I then when back and left the "Not" but changed the category to "Other (not classified)" which is what I think it should be and am still able to file electronically.  

[arb2]

Was your return accepted by NY after this change? Please let me know since I am in the same situation.

[MGClark]

Yes, NY has accepted my return.  I don't know if I'll get questions down the road but it has been accepted.

[mmccluskey1]

New York requires public employee 414(h) retirement contributions must be reported as an addition modification to Federal AGI on the New York tax return. These contributions are reported on line 21 of both Form IT-201, Resident Income Tax Return, 

Enter this as an addition to income

[MGClark]

mmccluskey1, I don't know if you read my and the situation of many others on this thread.  I am a non-resident of NY.  My spouse and I do not live in NY and never have.  I do some work in NY so have to file as a non-resident.  The 414h is related to a spouse that never worked in NY.  It is a non-NY 414h that has nothing to do with New York.  Does that change your opinion?

[mmccluskey1]

That was a quote from the new york department of taxation and finance. New Jersey says:

This New Jersey Division of Taxation website states:

Credit for Taxes Paid to Other Jurisdictions

If you are a New Jersey resident with income from sources outside New Jersey, you may be eligible for a credit on your New Jersey tax return. You may qualify for a credit if you paid income or wage tax on the same income in the same year to both New Jersey and to another jurisdiction outside New Jersey.

To avoid double taxation, in the NJ return look for  Credit for Taxes Paid to Other Jurisdictions.

[mmccluskey1]

This link takes you to instructions on how to enter the credit entry in NJ. return. You're filing NY as MFJ. NY is taxing your spouse's 414H carried from your federal return. If the NY returns were filed MFS I don't think this would be an issue. But the credit for taxes paid to other states would certainly be easier and resolve the problem.

If that link doesn't work search for

TurboTax How can I calculate the other state tax credit as a New Jersey resident who works in New York?