My W-2 shows my state income broken up between the two states in box 16. Enter the wages and other information from Form W-2. Often different than Box 16 and Box 1 (Federal Wages). Thanks for contributing an answer to Personal Finance & Money Stack Exchange! To learn more, see our tips on writing great answers. That overlaps on all reports (NY, NJ, federal). It is not common to have any local tax at all - only a very few states even have a local tax. Why would that be? California wages, for example, can be higher than federal wages (if you have deductions for contributions to an HSA- Health Saving Account), as California does not allow a deduction for those contributions. Select CA in the State column. More common is that one or more of your defined benefits, like a 401k or pension plan or similar, is not set up properly: 6wB @Staticcreature. However, my federal adjusted gross income is entered for box 13 with no adjustment in box 14 (subtractions). So I have an employee who works just over the border in another state. Box 17 By clicking Accept all cookies, you agree Stack Exchange can store cookies on your device and disclose information in accordance with our Cookie Policy. You have clicked a link to a site outside of the TurboTax Community. Sometimes employers use unused boxes for other information when they should not. Example: An employee has the following: $10,000 Total Wages $10,000 for City Wages $10,000 for School District Wages You have clicked a link to a site outside of the QuickBooks or ProFile Communities. In Box 17 enter the amount of State income tax withheld by holding down Ctrl+E. You may see boxes 1, 3 and 5 have different amounts and wonder if this is wrong. wit (view in My Videos) For Community resources and topics mentioned in this Was just running my W2s and (after much searching, my W3, because again, QBO doesn't think I actually need to see my W3) and saw on my W3 that the state and federal income amounts were different. Some states and localities do NOT recognize deductions which reduce the taxable salary, such as 401K or 403B contributions. Why the obscure but specific description of Jane Doe II in the original complaint for Westenbroek v. Kappa Kappa Gamma Fraternity? Why don't my state and local wages match on my W-2? Sometimes Box 1 is lower, but not always. 10 Under federal law, premiums on group-term life insurance of $50,000 or less are excluded from an employee's taxable wages. endobj For example, you may need to use this field if the home state doesn't recognize pretax deductions to taxable wages, so the state taxable wages are greater than the federal wages that do recognize pretax deductions. The fact that it is less for you would mean your local taxes could be less than if they were the same. Local income tax policies vary by city and state, can you provide those? The federal income reported is higher than your state income. I don't know of cities or counties that doe this (they normally key off of the state income), but we don't know which state and which locality you are talking about. Is there a generic term for these trajectories? Pre-tax insurance plans decrease the amounts in Boxes 1, 3, and 5 because they aren't subject to Federal Withholding, Social Security, or Medicare. To determine Social Security and Medicare taxable wages on your W-2, again begin with the Gross Pay YTD from your final pay stub and make the following adjustments if applicable: Social Security and Medicare Taxable Wage Adjustments to Gross Pay YTD: Before-Tax Dental deductions YTD Before-Tax Vision deductions YTD Before-Tax FSA Health deductions YTD Before-Tax FSA Dependent Care deductions YTD Before-Tax HSA deductions YTD Before-Tax Parking deductions YTD Before-Tax T Pass deductions YTD, Add GTL imputed income from Box 12C on your W2. If you had wages, salary, or other types of employment income they will all be reported on your W-2. Did the information on this page answer your question? The withholdings are correct! Your employer withheld PA income tax from your wages at a rate that is more than the 2020 tax rate of 3.07 percent. The W-3 form is the transmittal of Wage and Tax Statement, which summarizes the W-2 employee information in a given year about: As for the Box 16 on your W-3, it is the total state/local wages and income tax shown in the corresponding boxes on the Forms W-2 included. Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type. Enter the amount of income for each state, that does not exceed the Federal total income. If you are working in an area that has these taxes, it is common for the amount in Box 18 to match those other boxes you have mentioned. Hence your employee's total yearly wages show twice on their W-2 state section (even if you've already set up the other/incorrect state to do not withhold), I encourage you to reach out to our Payroll Care team. For example, here's a list from my city's web site: Wages, salaries and other compensationBonuses, stipends, and tip incomeCommissions, fees and other earned incomeSick pay (including third party sick pay)Employer supplemental unemployment benefits (SUB pay)Strike payVacation payEmployee contributions to retirement plans & tax deferred annuity plans (including Sec. When preparing your tax return you will need to include some details from your income documents about the money you earned and taxes you paid in the US. Because this ridiculous QBO system does not LET us choose which states an employee reports to. Code DD: Cost of employer-sponsored health coverage. Federal law sets a baseline minimum wage of $7.25 an hour for most U.S. workers, but states are free to adopt their own, higher minimums (and in some states, so are cities and counties). I need to pay local income tax in my new city/state, something I did not need to do before. Federal Minimum Wage vs. State. aD59G^JwzQjzJgX]m~2>q{TiuPo\+VK\3QFU}/ I live in Ohio but work in Kentucky and so I have local tax withheld on my W2 for both the city of Covington and Kenton County. Many States do not allow federal tax treaty agreements and they tax the total income. My 401(k) contributions were being withheld/taxed at the local level, but not at the state level. These add up to the total income shown in box 1, which is expected. It's also higher than box 16, my state wages. CA allows an exclusion from gross income for certain employer-provided benefits for a taxpayer's registered domestic partner and that partner's dependents. Box 16: State wages. Why does Acts not mention the deaths of Peter and Paul? You can contact Sprintax Live chat to help you with the tax preparation process.*. Box 17: State income tax withheld. For more information on how W-3 form populates, see these helpful links: In case you'd want to print your W-3 form, here's an article for your guide:Print W-2 and W-3 forms. This is simply an alert to make sure your details are correct. It can be normal to get different numbers, but it's not that common. Perhaps the locality and state treat part-year residents differently. They are separated out in box 3 and box 7 for Social Security. An employee who earns tips may also have different amounts in Boxes 1, 3, and 5. He also rips off an arm to use as a sword. GagaZA66N0tL-ESZ5wlAm/,M;${Udp~ip :=Ie0}s6O{AB,yC@t3Lxd| v;2iO)x@KmP9(_gw-V_\lZ4h\BGU^W[bK7Pp"|oGtpj#":uInL5.@mZJ'(;Y\O f}qo9 If these figures are the same, this is your taxable wage. Two good tools to use to locate the difference: - The Payroll Detail Review report (at Reports | Employees & Payroll) will show you, per employee and per tax, the wage base and the tax for each paycheck, as well as what QB thinks the wage base and tax should be based on your current configuration. This income, covered by a tax treaty is often reported on 1042-S form and the rest of the income is reported as federal wages in box 1. to receive guidance from our tax experts and community. Enter US if the item pertains to the Federal amount, a return not being processed, or to a state with no income tax. The Social Security Wage Base for 2019 was $132,900. My Box 18 (local wages) is higher than Box 5 which I always thought reflected my gross wages. The short answer is that the differences relate to what wage amounts are taxable in each case. The State of NJ site may contain optional links, information, services and/or content from other websites operated by third parties that are provided as a convenience, such as Google Translate. The most common questions relate to why W-2 Wages differ from your final pay stub for the year, and why Federal and State Wages per your W-2 differ from Social Security and Medicare Wages per the W-2. You have clicked a link to a site outside of the TurboTax Community. Can we please revisit this question in 2022. Actually, no. Avail of our 24/7 Vita Qualified Live Chat facility. Any help is appreciated! The FICA tax rate, a combination of the Social Security (6.2%) and Medicare (1.45%) rates, remains at a total of 7.65% in 2022. States can set their own minimum wages, and so can local governments. of taxable wages earned in that state. Which explains why the state wages on my W3 were higher than the federal wages. Stack Exchange network consists of 181 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers. Pre-tax insurance plans don't report in Boxes 12 or 14 on the W-2. If you worked for the same is there such a thing as "right to be heard"? The U.S. differs from most other countries in how it sets its minimum wage. Lets look at an example of an employee who has a 125 health insurance plan.The employee made $75,000 and contributed $5000 to their health insurance this year. Hello, The 2022 Form W-2 includes warrants/payments with issue dates of January 1, 2022 through December 31, 2022. Results. x2~l$iAK3[?gPo`6e?V-j[^c6}au/fGu+ u@+ KGk p1=QU6R cSG>##pQ]?u5w3% w4mk*~I)bce'47xO-yd J/@!_Z^ `x V[6mv-s2'U0GB%l&ewK:tQqGKEYB"HPyU`+k e? My CA state wages are $6,000 lower than the federal because my employer paid benefits for my domestic partner that are taxed by the federal government but not the state. Frequently Asked Questions. Connect with and learn from others in the QuickBooks Community. It is not common to have any local tax at all - only a very few states even have a local tax. Box 1 - Wages, tips, and other compensation (for Federal Income Tax): 65,000.00 (75,000 - 10,000), Box 5 - Medicare wages and tips: 75,000.00, Box 1 - Wages, tips, and other compensation (for Federal Income Tax): 70,000 (75,000 - 5,000), Box 5 - Medicare wages and tips: 70,000.00, Box 1 - Wages, tips, and other compensation (for Federal Income Tax): 75,000.00, Box 5 - Medicare wages and tips: 80,000.00, Box 1 - Wages, tips, and other compensation (for Federal Income Tax): 50,000.00, Box 5 - Medicare wages and tips: 50,000.00. I tried to google the answer and cannot find an answer besides that box 1 and and 18 should be different. Does Ohio also allow these amounts to be excluded? But remember, if you are having any trouble completing Step 3, our Live Chat team is available 24/7 to help you. x]s(vl tM:6e&ssmJ9x(rwoW7f}w~Vkd%3n%[wgg}8? Controller's Office1608 Fourth Street, Suite 201Berkeley, CA 94710-1749. You would have to ask your employer that. This is a taxable fringe benefit known as Personal Use of Company Car (PUCC).The employee made $75,000 and the value of PUCC is $5000 for the year. When filing the state tax form, do we need to add both state tax (W2 - Box 17) and local tax (W2 - Box 19) for reporting the total tax withheld by the state OR the amount in Box 17 suffices? If you have any other questions about payroll or QuickBooks forms, please let me know by adding a comment below. Code W: Employer Contributions (including amounts the employee lected to contribute using a section 125 (cafeteria plan) to your health savings account. For example, if you worked from Dec. 18, 2022, through Jan. 3, 2023, and were paid on Dec. 25, 2022, and Jan. 10, 2023, respectively . Prepare your US nonresident alien tax return today! In order to prepare your tax return, you will need to have your income documents close at hand. <> Personal Finance & Money Stack Exchange is a question and answer site for people who want to be financially literate. The employee didnt receive the extra money on their paycheck, but the value of the fringe benefit or company contribution is included in the W-2 amounts for the appropriate tax calculations. We'll help you get started or pick up where you left off. Why are players required to record the moves in World Championship Classical games? What were the most popular text editors for MS-DOS in the 1980s? By clicking "Continue", you will leave the Community and be taken to that site instead. Beneath that you would see the next state listed in Box 15 followed by the wage earned in that state in Box 16. Check with your state labor market information office for additional data specific to where you live. Many do. Employers must also withhold an additional 0.9% (2.35% total) of Medicare tax on earned income of more than $200,000 in a tax year. <> You are a resident of a reciprocal compensation agreement state and your employer withheld PA income tax. You need to check with your city. Note: Do not make an entry in State Wages, if Different under the State and Local section. Effective January 1, 2023, the New Jersey minimum wage is $14.13 per hour for most workers. How to apply a texture to a bezier curve? I'm always ready to help. Otherwise you'll have to ask your employer. Here are a few common reasons for differences between Box 1 wages vs. Social Security wages, Medicare wages, and state and local income wages: 1. 18 I'm always here to help. Will that have a different effect on my Local taxes owed? Did the Golden Gate Bridge 'flatten' under the weight of 300,000 people in 1987? IvyL.Mo Posts: 1, Reputation: 1 New Member `M?C}:}]B $mK6_"mTH /Lvfb-*&>Bvv/+*,j#\z`X[ge p$!Uq-(cg6__'96UVjk.n`gB%5;a[ ) By clicking "Continue", you will leave the community and be taken to that site instead. Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type. That would get you the right answer for you, as opposed to us just guessing. Why do I owe federal tax on my 1040NR tax return? entertainment, news presenter | 4.8K views, 28 likes, 13 loves, 80 comments, 2 shares, Facebook Watch Videos from GBN Grenada Broadcasting Network: GBN News 28th April 2023 Anchor: Kenroy Baptiste. I can guess this is something to do with 401k being treated differently for local and state taxes, but I'm not sure exactly how. It is subject to Social Security and Medicare taxes, so its included in Boxes 3 and 5. If you are subject to Ohio School District Income Tax (SDIT), you can not get a credit, for KY local taxes withheld, on an SDIT return. Does your employee have any of the following? You should replicate the information that is on your income document (W-2, 1042-S or 1099, etc) into the relevant fields on the Sprintax site. Can I deduct both ways? 17: State income tax: The total state income taxes that were withheld from your compensation. {`-o p{~& &+KjSYe?T e* Qr2? Please check if your details are correct The two are the sum of the respective numbers on the W-2's, so if they are wrong it is in turn because one or more of the W-2's are wrong. Box 18: Local wages. The Medicare wages in Box 5 on your Form W-2 are greater than your PA wages in Box 16. /Annots [9 0 R 10 0 R] Is there local tax withheld on box 19? So NOW what do you suggest I do, QB help? However, the local income reported in box 18 is signifcantly more than the second state income (the state I moved to) in box 16. Well it figures, while driving the convertible top flew open and bent the bars so it wouldn't close anymore. 2 0 obj The resulting amount should equal Box 3 Social Security Wages and Box 5 Medicare Wages on your W-2.If you find that after making these adjustments to your Gross Pay YTD per your final pay stub, the result does not match Box 3 Social Security Wages and Box 5 Medicare Wages on your W-2, call Central Payroll, 617-495-8500, option 4 for assistance. How do I use Form 8915 to report my 2020 COVID What's the difference between a conversion and Premier investment & rental property taxes. Box 1 - Wages, tips, and other compensation (for Federal Income Tax): 65,000.00 (75,000 - 10,000) Box 3 - Social security wages: 75,000.00 401(k) is not subject to Federal Income Tax, so its not included in Box 1 wages. Thought that would take care of the idiocy of a system that doesn't actually allow it's operator to make any kind of executive decisions.But nope, it didn't fix it. Note: Do not make an entry in State Wages, if Different under the State and Local section. The Office of the Vice Chancellor of Finance is committed to inclusiveness and ensuring that our websites and digital content are accessible to everyone. The difference can be significant if you get a substantial raise or reduction. *If our Bot Stacy cannot answer your question, you will be able to chat with our Live chat agents. Box 18 (W-2) may often differ from Box 1 and Box 16. Yeah, no again. employer in multiple state, there may be multiple lines of information. To learn more about how Quickbooks defined each box and field on the W2/W3 Form, I recommend checking out these articles: I also recommend checking out the topics from this link for additional tips when preparing your year-end forms and taxes:Year-end checklist for QuickBooks Desktop Payroll. Thanks for joining the thread.