, Answering FAQ'sTurboTax Employee
It has been reported that an error occurs in TurboTax if the amount of wages reported in box 16 of the W-2 is greater than the wages in box 1.
This is an e-file requirement set forth by the individual state, as there are states that do not allow a return to be e-filed where box 16 is a greater amount than box 1 of the W-2. New York, for example, is one of these states.
Therefore, if box 16 is greater than box 1 on your W-2, you will need to file your state return by mail.
This is not an issue with filing your federal return in this case, but this does vary by state on what they will allow to be e-filed and what cannot.