W-2 Box 16 State wages less than the Box 1 Wages, how to input in Proconnect and CAform 540?

[workhard2022]

Case:  I received a W-2, box 16 state wages amount less than the box 1 wages.  

Question:  (1) does this Form W-2 sound correct?  In some cases, the box 16 state wages will be greater than the box 1 wages.  But this is the first time, I saw Box 1 < box 16.

(2) Proconnect automatically used the W-2 box 1 wages into California return which is Form 540/Line 12 state wages. Is this right since it does not match with W-2 box 16 state wages?  how should I resolve this?

Thanks!

[qbteachmt]

"(1) does this Form W-2 sound correct?"

Yes. Every State handles the income taxable through them according to their own process. It might be the same as Fed, then pro rated tax as a %, with tax credit for other States paid. Or, it is an amount, and...

"(2) Proconnect automatically used the W-2 box 1 wages"

you need to allocate per State. Also, some States don't treat certain deductions/additions the same as each other or as Fed, such as certain reimbursements or allowances or benefits are taxable or not taxable or pretax. That's why State wages might even be higher than Fed.

You cannot consider adding up State wages on a W2 will = Fed wages. That isn't how the payroll would be listed.

Not knowing exactly how far you got, I found a couple of articles for you that should be helpful:

https://accountants.intuit.com/support/en-us/help-article/multi-state-taxes/entering-multi-state-amo...

https://accountants.intuit.com/support/en-us/help-article/form-w-2/entering-w-2-wages-withholdings-m...