States add to more than Federal

[greg7]

(Using PCO)

I have a client who received two W2s from the same employer:

- W2#1 lists IL and NC income and wages that total to $15,411 LESS than the amount listed in Federal box 1

- W2#2 lists VA income and wages of over $23k, but ZERO in Federal Box 1.

The total of all State Wages is MORE than the Federal Wages in box 1 of W2#1.

I can only assume that one of these states is counting more wages than the IRS is due to a misalignment of laws.

I have tried entering this into PCO a number of different ways.

- entering into the Federal Wages box each of the three state incomes with the state identified for each, but the total equals more than the total federal in box 1 of W2#1 and results in tax on that amount instead of the lower wages shown in the Federal Wages box of W2#1.

- entering a fourth entry in the Federal wages box of a negative value with 'US' identified, to reduce the amount for Federal.  This results in critical errors in the return.

- entering the Federal wages in the Federal wages box, then adding each of the State Wages in 'State Wages (if different)' box.  This results in critical errors in the return.

I have asked the client to check with her HR department to see if the zero Federal wages in the VA W2 was an error, but they won't respond until after the deadline.

I'm tempted to file with the higher (state) wages as the Federal wages and then amend if corrected W2s come in later.

Please help - any other ideas? I've never experienced this before.

[PhoebeRoberts]

What critical errors are you seeing? A negative amount coded as US is the normal way to enter that type of W-2, and doesn't usually produce a diagnostic. 

[greg7]

On the state returns, I get errors everywhere it pulls in the Federal income, telling me that the amounts don't add up (somethlng to the effect of "nonresident and resident portions add up to more than Federal wages".  It's a multistate return, so it gets all bent out of shape.

I just tried entering the three State wages in the Federal box 1 and sourced them as 'S' then also added the full federal wages and sourced it as 'N' and it seems to be pulling everything through correctly.  Will this work?

[George4Tacks · Accepted solution]

Yes. N and S are what were needed.