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How to resolve Lacerte diagnostic ref. 4992 - Withholding (W-2 Box 17) is greater than 1/2 of wages

by Lacerte Tax 2023 Updated 7 months ago

This diagnostic is informational only and won't prevent the return from being transmitted electronically. However, the state may return a rejected status, in which case the return will need to be paper filed.

This article will help to clear the following informational e-file diagnostic: 

  • Form W-2:  State wage, tips override (W-2 Box 16) results in the state income tax withholding (W-2 box 17) being greater than 1/2 of the state wages in W-2 box 16. (ref. #4992)

To clear the diagnostic:

  1. Go to Screen 10, Wages, Salaries, Tips.
    • A W-2 is entered with state withholding exceeding 1/2 of the wages sourced to the state.
  2. Make sure these entries are correct and sourced to the correct state.
    • Income, Box 1 (code 3)
    • Withholding, Box 17 (code 14)
Lacerte Tax

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