Ok, we've tracked this problem down to a year over year conversion problem when an itemization exists on a 0 value in a W2.  Another team owns that, so I don't currently have an ETA on a fix. 

Work Around Options

• Don't try to import files with this problem and wait for a fix
• Remove the itemization(s) (? Sorry for being naive - i'm not sure if that's reasonable or not.. i'm an engineer, not a tax guy)
• Temporarily set the value from 0 to 1, import, then set it back to 0 (? Again, sorry if that's not a reasonable work around)

-- Historical Note for Google Searches and/or Tribal Knowledge --

This error code, "Out of memory" is used in a ton of places for a ton of hypothetical reasons. If you're getting this error and the details in here don't seem applicable, they probably aren't and you're dealing with a different instance of this error.