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). Thanks for figuring out the cause of the issue and for sharing it in the Community. The Medicare wages in Box 5 on your Form W-2 are greater than your PA wages in Box 16. The easiest way to prepare your tax documents online is by using Sprintax Returns (formerly Sprintax Tax Preparation)- the nonresident alien tax return software. Well it figures, while driving the convertible top flew open and bent the bars so it wouldn't close anymore. The difference can be significant if you get a substantial raise or reduction. If you worked for the same employer in multiple state, there may be multiple lines of information. Once for the correct state, and once for the incorrect one. States can set their own minimum wages, and so can local governments. Hence, the diffierent amounts for salary. 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. - The Tax Form Worksheets (at Reports | Employees & Payroll | More Payroll Reports in Excel) can be run to include worksheet versions of your W-2's that let you zoom on on the details of what is included on many boxes, including Box 1 and your state income tax. After much wasted time, I see that the issue is that one employee, and on his W2, both states are listed. Your list was incredibly helpful, thank you! Hi there, @superiordry. Our software is designed so that the data you will be entering, and the screen that you are viewing should look very similar to the paper document that you have beside you. Why is it shorter than a normal address? @Staticcreature. Site design / logo 2023 Stack Exchange Inc; user contributions licensed under CC BY-SA. For you, typically your taxable wages for the local earned income tax are the same as they are for Pennsylvania income tax (which is often different from federal tax). Most likely due to the treatment of certain employee benefits. If these figures are the same, this is your taxable wage. deductible as part of the deduction for state and local income taxes on The difference can be significant if you get a substantial raise or reduction. CALCULATING FEDERAL AND STATE TAXABLE WAGES (BOXES 1 & 16). 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. In most cases the Wage Base for Federal and State taxes will be the same. 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. How to add investment income in Sprintax when filing a tax return, J-1 J-1 . Box 16&18 have different figures, I did not work in different locations, what do I do about box 18, should I add it to the box 16? Deductions like retirement can decrease the amounts in one or more of the boxes because they may be not subject to Federal Withholding, Social Security, or Medicare. Thanks for contributing an answer to Personal Finance & Money Stack Exchange! Box 18 (Local Wages) shows the wages earned in that particular locale, which could be a county but can also be a city. If you received any scholarship, stipend, housing allowance, royalty payments, or other types of award that is paid to a nonresident, this is generally recorded on a 1042-S form. California does not conform to federal law . PA - State Wages Not Flowing to the PA Individual Return (W2) 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? It's also higher than box 16, my state wages. The amount reported with code DD is not taxable. Welcome Katelynne, who is here to share some quick tips to help you out Reporting Multiple State Earnings on the W-2 | Complete Payroll PDF New York State Department of Taxation and Finance Office of Tax Policy The description is a memo only, or you can print it with the return as a Code Note by setting the Print As option to "Statement" or "Diagnostic.". Why don't my state and local wages match on my W-2? Why do I have to pay Ohio tax? My status for 2005 was F1/OPT. I'm here to help. If you live and/or work outside of California and withholding was required for that state, the corresponding state code and identification number will be listed as well. Box 16: State wages. /XObject <> It is subject to Social Security and Medicare taxes, so it's included in Boxes 3 and 5. If the Forms W-2 show amounts from more than one state or locality, this report as one sum on the Box 16. Usually, the difference relates to what wage amounts are taxable in each case. Perhaps the locality and state treat part-year residents differently. State Taxable Wage Adjustments to Gross Pay YTD: The resulting amounts should equal Box 1 Federal Wages and Box 16 State Wages on your W-2. What is the income tax exemption proration policy for Massachusetts part-year residents? 401k) then it will still impact the state tax amount, as it does impact Wage Base, but it will not reduce Box 1 because it does not have a tax tracking type that impacts box 1 (even though it may impact the Federal Withholding calculation.). 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. So NOW what do you suggest I do, QB help? Have a good day! When you locate the difference, then consider if it is correct or not. Why? Even among the 38% of Americans who . So if you had state withholding in more than one state, you would see the first state listed in box 15 followed by the wage earned in that state in Box 16. This, in turn, means you'll likely have to amend your federal or state tax forms for one or more quarters. 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. Did the information on this page answer your question? If there are incorrect amounts or errors, you need to review your paychecks and the payroll items linked with them. State Wages are simply the wages taxed for the state income tax item, the Wage Base in QuickBooks. Does a password policy with a restriction of repeated characters increase security? <> State And Federal Employment Tax Changes For 2022 I just want to ask, since I don't know what to do yesterday about my 2 local disk partition, I decided to re-install the OS, and delete all the local partition that I have. You are correct, most local jurisdictions stop at the amount in box 5. Hi, If you received an income that was not reported on any of these documents, you still have an obligation to report that income to the IRS. PDF Which wage figure do I use from my W-2 to file my local return? I got 1099-NEC that reports box 1 income but no state income (box 7), is this possible or an error? It is subject to and additional 20% tax plus interest. Check with your state labor market information office for additional data specific to where you live. Your employer pays an additional 1.45%, the employer part of the Medicare tax. Spicemas Launch 28th April, 2023 - Facebook Defined contribution plan (DCP) casual (CAS) or regular (REG) contributions. Enter US if the item pertains to the Federal amount, a return not being processed, or to a state with no income tax. If an employee elected to contribute to a pre-tax retirement plan, their W-2 Box 1 wages are likely lower than their Box 3 wages. Clergy, employees on a work Visa, and some family members of business owners are a few examples. 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. 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. I'm always ready to help. Box 18 is for state and local taxes, not all W-2 will have these. You can contact Sprintax Live chat to help you with the tax preparation process.*. To learn more, see our tips on writing great answers. You have clicked a link to a site outside of the QuickBooks or ProFile Communities. Code Z: Income under a nonqualified deferred compensation plan that fails to satisfy section 409A. See "Other Taxes" in teh Form 1040 instructions. Note: Do not make an entry in State Wages, if Different under the State and Local section. Does Ohio also allow these amounts to be excluded? In some cases the different amounts are correct. 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. endobj I also was wanting to know what a good salary range is ? That overlaps on all reports (NY, NJ, federal). 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. 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. Back to Table of Contents Code DD: Cost of employer-sponsored health coverage. 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. We are actively and continuously working to increase the accessibility and usability of our websites and digital content. Get Support. Enter the amount of income for each state, that does not exceed the Federal total income. You would have to ask your employer that. Effective January 1, 2023, the New Jersey minimum wage is $14.13 per hour for most workers. Your taxable wages (Box 1) and your state and City wages (Boxes 16 and 18) are reduced because of your TDA contributions. These add up to the total income shown in box 1, which is expected. Box 16 reports the total amount of taxable wages earned in that state. Why are my federal and state W-2s different? - nj.com <> How do I clear and start over in TurboTax Onli Premier investment & rental property taxes. The 2022 taxable wage base subject to the Social Security portion of the FICA tax is $147,000, up from $142,800 in 2021. I'm always here to help. Most Americans favor raising the federal minimum wage, which has been $7.25 an hour since 2009. Berkeley Main PageOffice of the Vice Chancellor of Finance - Chief Financial Officer, Copyright 2023 UC Regents; all rights reserved, Office of the Vice Chancellor of Finance - Chief Financial Officer, Wages, bonuses, and other cash compensation (including prizes or awards), Taxable employee business expense reimbursements, Health care (HCRA) and Dependent care (DepCare) contributions. Schedule A. Why are my federal wages different from my state wages? - Sprintax Blog We'll help you get started or pick up where you left off. First, 401 (k) elective deferrals are excluded from. I was wondering if you could tell me if you think 55000 a year cdn is a good number or if its too low? 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. My gross state wages aren't the same as my gross local wages on my W-3 Ask questions, get answers, and join our large community of Intuit Accountants users. I'm always ready to help. Beneath that you would see the next state listed in Box 15 followed by the wage earned in that state in Box 16. I've been trying to confirm if I can get that refunded, since I do not live in Kentucky, but haven't had much luck. Select OR in the State column. We are a Michigan company with a few Wisconsin employees and on my W-2 it shows the Michigan & Wisconsin wages but it is duplicating the State wages on my W-3? 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. Many do. You are a resident of a reciprocal compensation agreement state and your employer withheld PA income tax. 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. So on the employee page when I set him up, I chose "do not withhold" for the state that he should not be paying into. Do you even have a local tax where you live? You can see there the items that contribute to the final Box 1 numbers to verify that is correct . *. Box 18 being usually lower. Please refer to the UC Berkeley Web Accessibility page if you are having difficulty accessing any of the information and/or content on our websites, or if you have an accessibility related question or comment. If the PA state wages and local wages are not the same or if no local wage (box 18) is reported or there is a higher wage figure listed in another income box, compare the wages reported in box 5 (Medicare wages) with box 16 (state wages-PA). 401(k) is not subject to Federal Income Tax, so it's not included in Box 1 wages. There continues to be no limit on the amount of wages subject to the Medicare portion of the tax. You should only use the (16) Stage wages, if different field on Screen 10, Wages, Salaries, Tips for multi-state W-2s if the amount of wages for the resident state is more or less than the federal amount. In your case, it sounds like you're employed in NYC. Prevailing Wages: Frequently Asked Questions So QBO payroll decides that I need to report him to both states. Can my creature spell be countered if I cast a split second spell after it? Code Y: Deferrals under a section 409A nonqualified deferred compensation plan. W-2 Displays the following income items: Federal 30,000, Arkansas 12,000, Kentucky 16,000, and Ohio 31,000, Enter this information accordingly:In the field, (1) Wages, tips, etc. 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. The federal return will reflect total wages of $25,000. However, the local income reported in box 18 is signifcantly more than the second state income (the state I moved to) in box 16. x]s(vl tM:6e&ssmJ9x(rwoW7f}w~Vkd%3n%[wgg}8? Box 18 reports the total amount of wages subject to local, city, or other state income taxes. Those boxes represent your wage base for taxes. What is the difference between box 16 and box 18 on the w-2? Which explains why the state wages on my W3 were higher than the federal wages. 1 0 obj The 2022 Form W-2 includes warrants/payments with issue dates of January 1, 2022 through December 31, 2022. Residency for Out of State Student Getting Married, State taxes for convoluted NY/NJ work situation. 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. If you worked for the same endobj employer in multiple state, there may be multiple lines of information. Qf Uw_3L $<3j{_C28Z 16: State wages, tips, etc: The total state taxable gross pay you received. I rented a car from AVIS, chose not to have to Loss Damage Waiver. "~/ 3Y/CiPB1Zi\))XqB Why are the State and/or Local Wages Doubling on the W-3? - Thomson Reuters 17: State income tax: The total state income taxes that were withheld from your compensation. Hello, For example, the combined wage and benefit rate that prevails for food service workers on federal contracts in Durham, North Carolina, is $15.45nearly twice the state minimum wage of $7.25. /Annots [9 0 R 10 0 R] Otherwise you'll have to ask your employer. Same occupation, different pay: How wages vary - Bureau of Labor Statistics Some employees may see a difference between Box 1 Federal Wages and Box 16 State Wages due to the value of certain pre-tax transportation benefits. 6wB Note: The description does not transfer to the return. The reciprocity agreement, between KY and OH on state taxes, does not apply to local city and county taxes. If any of the W-2s are W-2Cs (corrected copies of the same W-2), only enter those one time each. Why did that happen? Live Chat team is available 24/7 to help you. Two good tools to use to locate the difference: - The Payroll Detail Review report (at Reports | Employees & Payroll) will show you, per employee and per tax, the wage base and the tax for each paycheck, as well as what QB thinks the wage base and tax should be based on your current configuration. What does your W2 say for "Local Wages" ? : r/tax - Reddit Bh=}lAr3$A{/^1u:1U1mApQh! = Lacerte fills in the ST (state) column of the first empty row with the state displayed in the State Inventory box. Auto-suggest helps you quickly narrow down your search results by suggesting possible matches as you type. Form W-2 Box 1: Guide for Navigating Through Confusing Discrepancies Why don't my state and local wages match on my W-2? What positional accuracy (ie, arc seconds) is necessary to view Saturn, Uranus, beyond? Why are players required to record the moves in World Championship Classical games? State Wages are simply the wages taxed for the state income tax item, the Wage Base in QuickBooks. ?0j^CFGjg'c@5J/+.A7B 'DM3Y^BIF-B\*[i?e_*Vn >i-_&gwNi2)n5j?A&Ezkz~-jm~;?/aG.^}^h,~#}@w>2Q\$OoN`",$$R Learn about things that affect the amounts in Boxes 1, 3 and 5 on your employees W-2s. wit (view in My Videos) For Community resources and topics mentioned in this If you have a client that has employees that are setup in multiple states or localities, the program will combine the state and local wages on the W3. In Box 17 enter the amount of State income tax withheld by holding down Ctrl+E. Why having good credit could cost you more on a home mortgage There's some tax free employer benefits that are not subject to federal and state tax, that the locals do tax. https://www.askmehelpdesk.com/showthread.php?t=17149, Send a private message to AtlantaTaxExpert. Connect with and learn from others in the QuickBooks Community. Because QBO again does not give it's operator any executive function, and therefore does not allow us to edit the W2s to correct them. to receive guidance from our tax experts and community. 3 0 obj Box 17: State income tax withheld. Enter 5,000 in the Amount column on the second line. Changing the type on the item will then fix the everything. Controller's Office1608 Fourth Street, Suite 201Berkeley, CA 94710-1749. What You Need To Know About Your Form W-2 This Tax Season - Forbes /Font <> Why would that be? Federal minimum wage overrides state if . LIVE: New Orleans Saints 2023 NFL Draft Recap Show - Facebook Connect and share knowledge within a single location that is structured and easy to search. /Parent 2 0 R The problem would seem to be that you earned $17,280 (henceforth $17k) while working in New Jersey but residing in New York. Your Form W-2 must reflect wages paid during the calendar year. 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. If you have questions about your W2 you need to ask your employer. Ask questions and learn more about your taxes and finances. It is subject to Social Security and Medicare taxes, so its included in Boxes 3 and 5. It can be normal to get different numbers, but it's not that common. So I have an employee who works just over the border in another state. Ideally, we're unable to directly edit W-2s to correct them since the info indicated is based on your payroll info and employee setup. Lets look at an example of an employee who used the company car for personal reasons. 10 Under federal law, premiums on group-term life insurance of $50,000 or less are excluded from an employee's taxable wages. New Orleans Saints, National Football League Draft | 762 views, 22 likes, 11 loves, 12 comments, 4 shares, Facebook Watch Videos from New Orleans Saints: LIVE: New Orleans Saints 2023 NFL Draft Recap. Please check if your details are correct Hand off your taxes, get expert help, or do it yourself. <> 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. The U.S. differs from most other countries in how it sets its minimum wage. You need to check with your city. t^hJ.L/=ZHj.od!EQpch?=LlN@+1sJ^,'OB 'tLt Ask questions, get answers, and join our large community of QuickBooks users. The short answer is that the differences relate to what wage amounts are taxable in each case. 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. Income tax laws vary by state, but it's fairly common for the state where you're employed to want income tax (in states that have income tax) regardless of where you live. {`-o p{~& &+KjSYe?T e* Qr2? My gross state wages aren't the same as my gross local wages on my W-3 and they should be. File a complaint, make . Registration and Permits. Avail of our 24/7 Vita Qualified Live Chat facility. Enter 20,000 in the Amount column on the first line. <> I'll definitely reach out to my employer and check the city tax website - that's something I hadn't thought about. 2022 Form W-2 Wage and Tax Statement FAQs - California State Controller Some states and localities do NOT recognize deductions which reduce the taxable salary, such as 401K or 403B contributions. Solved: Why is Box 18 higher than Box 5? - Intuit Medical expenses. My W-2 shows my state income broken up between the two states in box 16. Within the Sprintax system, we will give you the opportunity to report your full income to the IRS for the tax year. of taxable wages earned in that state. Box 17: State income tax withheld. Your employer withheld PA income tax from your wages at a rate that is more than the 2020 tax rate of 3.07 percent. Example: An employee has the following: $10,000 Total Wages $10,000 for City Wages $10,000 for School District Wages Only one shows taxes paid to it (as I set up the other one "do not withhold") so that is correct, but his total yearly wages are on his W2 state section twice. 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.
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