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March 25, 2024
Question

California state wages are lower than federal wages - but all my wages were generated in California

  • March 25, 2024
  • 1 reply
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Box 16, California State Wage, is lower than Box 1, Federal Wage.

However, the federal wage is used to calculate my California tax - as part of AGI

Is there a place where I can subtract the "excess" federal wage?

Full-time California resident; no wages were generated outside of California.

No health benefits for a domestic partner of whatever.

1 reply

Employee
March 25, 2024

@perplexed4 

Why are the wages reported in Box 1 Federal Wages different than Box 16 State Wages?

The amount in Box 16 state wages and Box 1 federal wages are usually the same.  However, CA wages in Box 16 may differ from Box 1 federal wages for the following reasons: 

  • Wages earned in another state. 
  • Medical expenses.  CA allows an exclusion from gross income for certain employer-provided benefits for a taxpayer's registered domestic partner and that partner's dependents.  
  • California does not conform to federal law regarding health savings accounts (HSAs). 
  • CA taxpayers cannot deduct contributions to federal HSA from their California Wages.   It is not excluded as income and is added to the taxpayers CA wages. 
  • Ridesharing benefits
  • Sick pay under FICA
  • Clergy Housing Exclusion 
  • Income is exempt by U.S. treaties (applies to the employees from the country that has treaty with the US). 
  • California and New York do not conform to the federal suspension of exclusion from income for qualified moving expense reimbursements under the 2017 federal tax law, HR.1, Pub. L. 115-97.  CA and New York allow exclusion from income for qualified moving expense reimbursements.
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March 25, 2024

NONE OF THESE APPLY

Wages earned in another state.DOES NOT APPLY

Medical expenses.  CA allows an exclusion from gross income for certain employer-provided benefits for a taxpayer's registered domestic partner and that partner's dependents. DOES NOT APPLY

California does not conform to federal law regarding health savings accounts (HSAs). CA taxpayers cannot deduct contributions to federal HSA from their California Wages.  It is not excluded as income and is added to the taxpayers CA wages. DOES NOT APPLY - ALSO CA iS LOWER THAN FEDERAL

Ridesharing benefits DOES NOT APPLY

Sick pay under FICA DOES NOT APPLY

Clergy Housing Exclusion DOES NOT APPLY

Income is exempt by U.S. treaties (applies to the employees from the country that has treaty with the US). DOES NOT APPLY

California and New York do not conform to the federal suspension of exclusion from income for qualified moving expense reimbursements under the 2017 federal tax law, HR.1, Pub. L. 115-97. CA and New York allow exclusion from income for qualified moving expense reimbursements. DOES NOT APPLY

VolvoGirl
Employee
March 25, 2024

Ask your employer why the state wages is different.  Don't know how to indicate that in the state return.  Switch to Forms Mode and look at CA return Schedule CA (540) and see if anything is subtracted from federal.