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Why is my state income from box 16 on my W2 divided by TurboTax in two jobs.

I have one job in Massachusetts. My state income is listed in box 16 of my W-2. TurboTax has divided it into two employers.
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7 Replies

Why is my state income from box 16 on my W2 divided by TurboTax in two jobs.

p.s. This is the Massachusetts non-resident return, income apportionment feature - where you apportion income between working days in- and out- of Massachusetts. I have one job in MA; none out of state. Somehow, TurboTax has divided my taxable federal income (W2 box 1) into my job (i.e., employer name) and "Income from Non-Taxing States." There is no other income from a non-taxing state. There is no other income at all. This problem is disallowing an electronic filing of the state return. 

AmyC
Employee Tax Expert

Why is my state income from box 16 on my W2 divided by TurboTax in two jobs.

I think you are saying that it is 100% taxable to MA and there are no circumstances where you worked outside of MA for it to be non-taxable. In that case, select No to apportion your wages.

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Why is my state income from box 16 on my W2 divided by TurboTax in two jobs.

No, this is what I am saying: I live in New Hampshire and have one job in Massachusetts. I work in my company's MA office two days a week; and from my home office in NH three days a week. My company does *not* withhold on this basis - they withhold as though I work every day in MA. As such, I myself apportion my wages based on in- and out-of-state working days as permitted on the MA Nonresident/Part-Year Tax Return, Form 1-NR/PY, line 13. I have been doing this for several years (through TurboTax). However, *this* year, TurboTax created two buckets of income for my MA return. One identified by my employer, and the other as "Income from Non-Taxing State." There is no other income at all, let alone from a non-taxing state. I can tell where the numbers came from: TurboTax took the difference between my federal taxable wages in Box 1 of my W2 and my MA taxable wages in Box 16 and called it "Income from Non-Taxing State." According to TurboTax, this is preventing me from electronically filing my federal and state return via TurboTax. Nobody wants to print and mail a return anymore, especially when paying TurboTax for the state return.

KeshaH
Employee Tax Expert

Why is my state income from box 16 on my W2 divided by TurboTax in two jobs.

The income showing as "Income from Non-Taxing State" would be the income that you earned while working from home in New Hampshire, since NH does not have a personal state income tax.

 

According to TurboTax's state forms availability site, the MA 1 NR-PY, Massachusetts Nonresident and Part-Year Resident Tax Return, is currently unsupported for e-filing which is why your return can't be e-filed. 

 

Why is my state income from box 16 on my W2 divided by TurboTax in two jobs.

The amount showing in TurboTax as "Income from Non-Taxing State" is not my income attributable to my working days in New Hampshire (which is 60% of my income). It is the difference between my federal taxable wages in Box 1 of my W2 and my State Wages in Box 16. That difference is only about 10% of my wages - I don't know why my state wages are different from my federal wages, but TurboTax created those two income buckets *before* I got to the working days apportionment screen.

 

But, as you say, it appears that one can't e-file the MA non-resident form. Strange - I did it last year and the year before, through TurboTax.

AmyC
Employee Tax Expert

Why is my state income from box 16 on my W2 divided by TurboTax in two jobs.

The states get ready at different rates. You can check forms availability here to see when efile is ready, every year, for every form. We keep that link updated.

 

MA taxes retirement income that you are deferring, see Letter Ruling 83-8: Deferred Compensation. So, if yu earn $10,000 in federal wages and had set aside $1,000 into retirement, MA would tax $11,000.

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Why is my state income from box 16 on my W2 divided by TurboTax in two jobs.

Thanks for that. It's frustrating, though, because it says at that link you included that the MA non-resident/part-year return can be e-filed. But TurboTax said that I could not e-file because of the "Income from non-taxing state" which TurboTax created. I have no income except from the taxing state of Massachusetts. That income is *apportioned* because of remote work, but as discussed the amount TurboTax deemed "Income from a non-taxing state" was not that - it seems to be about the tax on deferred retirement income you explained. I paid TurboTax to prepare the MA return, but ended up doing it myself from the state's online form and mailing it (the TurboTax print out of the MA return is deplorable).  Thanks for trying, but I think the program is broken in this way - newly broken, it worked in '23 and '22.

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