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January 29, 2022
Question

Am filing. I live in PA, still in PA, but a job in New York and one in Pennsylvania. On my compensation summary, my NY job shows up as NY and as PA. Why

  • January 29, 2022
  • 1 reply
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I am working on filing my taxes, and since i work in both NY and PA since i live right on the edge of both but reside in PA, have to file for both. But when it comes to my 'compensation summary' page, it shows my PA job as PA, but then my NY job is listed twice, one as state ID of NY and one as PA. Why is that and how do i fix it if i need to?

1 reply

January 29, 2022

Two state wage amounts on your W-2 could mean:

  1. You have New York and Pennsylvania withholding (uncommon)
  2. You changed addresses with your employer so you began or stopped withholding in one state and started withholding for the other
  3. Your compensation for NY and PA are different because PA is taxing your 401(k) contribution, while NY is not.

TurboTax will pick up the wages with the PA state code. Your credit for tax paid to NY will be based on your NY wage (because that's what NY taxed you on). As a result, you may owe some PA tax on the difference because the NY tax credit will not cover that income.

 

PA says:

 

Unlike the federal income tax law, contributions to a 401(K) or contributions to other types of retirement plans are considered part of the employee's taxable compensation and are subject to withholding requirements. The contributions are treated the same, whether made inside or outside a cafeteria plan.

 

However, when you retire and start receiving distributions, the amount you withdraw from your 401(K) plan is not subject to PA personal income tax.

 

Are my contributions to a 401(K) plan excluded from employer withholding?

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