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June 6, 2019
Question

How can I deduct township head tax, shown on pay stub but not W-2, previously deducted in Turbotax as a misc. tax?

  • June 6, 2019
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1 reply

DanielV01
Employee
June 6, 2019

Unfortunately, this is not deductible anymore.  "Occupational taxes"  are amounts that are charged by a municipality for the "privilege" (some use that wording in their tax code) of working there.  When this is the case, the tax could be deducted under miscellaneous deductions subject to 2% of AGI.  However, the Tax Cuts and Jobs Act of 2017 suspended that deduction.  So, on the Federal return, there is no way to deduct this amount anymore.

Not all states adopted this procedure, however.  You can still enter all of your employee expenses through the Federal section in TurboTax.  They won't be deducted on the Federal return, but if your state allows them, they will be deducted on the state return.

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