Exempt wages on Form W-2

[Reeciekee]

Client is a journeyman lineman, MT resident.  Worked in CA after October 2020 firestorms helping restore power to the grid.  Received Form W-2 with box 1 blank, SS & medicare wages $57k, CA wages $57k.  Notes to the side said: "Your gross pay was adjusted as follows: Gross Pay $59k, less nontaxable compensation $2k, less exempt wages $57k, reported W-2 wages $0".  I am baffled.  I have looked online for anything that may answer.  I know there are tax breaks for disaster victims, but he does not live in the disaster area.  He just was assigned down there to help restore power.  Any answers??  Maybe someone else can do a whole lot better research than me.......

[qbteachmt]

Wow, that is weird. I wonder if someone didn't understand what the phrase "Exempt employee" means? Instead of treating him as Salary, they treated him as income tax free? You are going to need to contact the employer's payroll people, if you want something to cite for reference. I sure can't find anything, and I'm pretty good at this type of research, and I taught Payroll for years.

And, of course, MT will want to tax all of it.

[PKCPAMST]

Are there any codes listed in Box 12 of Form W-2?

[Reeciekee]

None whatsoever.  I have given up & will call the Power Co.  Guessing they won't respond to me, that is IF I can talk to someone, and then will have to get a POA.  Oh, well.....  Thanks!

[Reeciekee]

I'm glad that I have found someone who thinks it is odd, as well.  I will give the power company a call tomorrow.  I know...."Good luck with that...."  Ha!

[TaxGuyBill]

I have stuck in my head that some rules about the STATE might apply (it is only taxed on the "home" state, not the 'other' state).  However, I wasn't able to find anything that said that, so maybe I made that up.   🙂