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.

[dina13]

Hi, this is the 2nd time this has happened to me.   I entered in Box 14 manually IRC 414H and IRC 125.  In the review before I Efiled, I saw the amounts. but somehow the program dropped it and never made it to NYS.  Again, I am paying interest in failure to report this to NYS.  This is very frustrating, I don't want it to happen again this year.  I want to Efile. Will I have to file by mail?  Please help.

[DaveF1006]

In New York, 414(h) and IRC 125 (NYC flexible benefits) are exempt from federal tax but taxable by New York State. If these amounts aren’t added back to your state income, New York may mark your return as underreported and send you a bill with interest.

This is often caused by a Category Mapping issue on the W-2 screen. Here’s how to fix it so you can e-file without any issues this year.

1. Go to your Federal W-2 entry.
2. In Box 14, enter your description (e.g., 414H) and the amount.
3. The Critical Column: Look to the right of the amount for a dropdown menu labeled "Tax Category" or "Category." 4. Do NOT leave this as "Other" or "Not Classified." You must select exactly

• For 414(h): "NY IRC 414(h) Subject to NY tax"
• For IRC 125: "NY IRC 125/SEC 18 Subject to NY tax"

[dina13]

Thank you so much for your response.  Because of this quirk with Turbotax's programming, it's cost me almost $700 to NYS.  Do I have any recourse with TurboTax?

[DawnC]

You can submit a claim here >>   How do I submit a claim under the TurboTax 100% Accurate Calculation Guarantee or 100% Accurate, Exp...   @dina13 

Before you submit your claim, make sure that:

• You received an assessment notice regarding a tax return filed with TurboTax that shows the penalties and/or interest you owe. For your initial submission, we just need to see a complete copy of your official government notice or letter; scan it as an image or PDF file so you can upload it.
• Your contact information is current.