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Deferred Compensation W-2

Level 2

I've got a client W-2 reporting payment of deferred compensation that has state wages in excess of federal wages.  Not sure how to process this.  Here are the details.

W-2 Box 1 wages of $370,454

W-2 Box 16 state wages show:

   Michigan wages $370,454 & Michigan tax withheld $15,744  (4.25% flat-rate withheld)

  Minnesota wages of $275,930 & Minnesota tax withheld $17,246 (6.25% flat rate withheld)

It looks like the intent of the payer is that the combined state wages are higher than the federal wages since the withholding for each state is at the rate to be used for large lump sum payments. 

Has anyone seen a similar W-2 and how do you enter it in Lacerte?  

Thank you for your help.  Charles Schneider CPA

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Level 15
2 Comments 2
Level 15

If Michigan resident, all wages are subject to Michigan tax.

Payer is apparently saying some of this is/was earned in MN.

Level 15

This should help with the how to https://proconnect.intuit.com/community/form-w-2/help/allocating-multi-state-w-2-double-and-separate...


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