When filing multiple state taxes, what is the difference between allocated income on a part-year return and state wages reported in box 16 on a W-2?

Forum|Forum|6 years ago
June 5, 2019
3 replies
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I recently moved states and the software is asking me to allocate my box 1 wages between states but I'm not sure what the difference is between what I allocate and what is reported in box 16. The sum of the amounts in box 16 does not equal box 1 also.

TurboTax Deluxe Online

Best answer by DanielV01

Here's some general guidance. Allocation is a term that means to designate, split or assign. When you are filing a part-year resident return in particular, amounts reported on your W-2 do not always reflect the correct income amounts actually earned in each state, so allocation screens allow for you to adjust the amounts accordingly. Please see this FAQ for more information: https://ttlc.intuit.com/replies/4777389

There are a number of reasons why the state amounts reported don't equal the box 1 amounts. For more detail, please comment on what are the two states, when you moved, did you continue to work in one state while living in another, and any other detail that might be helpful.

DanielV01Answer

Employee

Here's some general guidance. Allocation is a term that means to designate, split or assign. When you are filing a part-year resident return in particular, amounts reported on your W-2 do not always reflect the correct income amounts actually earned in each state, so allocation screens allow for you to adjust the amounts accordingly. Please see this FAQ for more information: https://ttlc.intuit.com/replies/4777389

There are a number of reasons why the state amounts reported don't equal the box 1 amounts. For more detail, please comment on what are the two states, when you moved, did you continue to work in one state while living in another, and any other detail that might be helpful.

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A

Anonymous

I moved from California to Oregon at the end of June and did not continue to work in California. The allocation I did was only off by less than $100 on the Oregon side but was about $2000 off on the California side so I wasn't sure which number (the allocation or the box 16 value) I was supposed to use.

DanielV01

Employee

@gaurav26

The answer is yes to both questions. NJ and PA do have a reciprocal agreement. If you are a PA (full-year) resident working in NJ, and NJ tax was withheld, then you file a NJ return with 0 income to receive a 100% refund of NJ tax withheld.

For PA, all of the income will be taxable. As long as the two lines associated with Box 16 on your W-2 divide your NJ and PA income, you will include both on your return. However if either of the two lines (NJ and PA) express at least the amount in box 1, then you will want to exclude the other line from taxes. Feel free to write back if this is the case, as there is a procedure to do this.

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S

Saugatuck71

I moved from CO to MI in November 2020. Why do I have to file a MI return as I did not earn any income in CO or in MI for the month and a half at the end of 2020 for the whole year?

DawnC

Employee

You were a part-year resident of 2 states during 2020, so you have to file a resident state return in both states - if required. Each state of different rules for income taxes. The state of Michigan states the requirements to file a MI state tax return as - Individuals must file if they owe Michigan tax, if they are due a refund, or if their federal AGI exceeds the exemption allowance. Residents are allowed $4,750 for each exemption, plus various special exemptions. Part-year residents must prorate the exemption allowance. TurboTax will transfer your federal AGI over to your state returns. If your exemption allowances exceed your federal AGI, you won't be required to file the state return.

Most states divide the income earned in that state by the total annual income to come up with a percentage. That percentage is then applied to the state tax on the entire year's income—no matter where it was earned—to prorate the tax liability. TurboTax follows the rules for each state.

How do I file a part-year state return? The link has links at the bottom that explain in greater detail how the taxes are calculated and how to allocate your income between states. @Saugatuck71

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B

Bfrazier76

I worked in New Jersey the entire year of 2021. I bought a house in New York. We closed in Feb. 2021, but I didn’t move till Nov. 2021. My W2 has $24,739.44 as total federal wages. Box 15 & 16 has NY $24,739 & NJ $30,108.36. Turbo tax has my total income at $55K which is completely wrong. Turbo tax also screwed up my resident status and had me as a partial resident of both states. How do I fix this and what is correct? Did my job mess up my W2?