Why are my State wages and Federal wages different on my W-2? First time seeing this!

This is actually pretty common and not something to worry about! The difference between Box 1 (federal wages) and Box 16 (state wages) can happen for several legitimate reasons. The most common reason is that certain deductions are taken out pre-tax for federal purposes but not for state purposes. Things like 401(k) contributions, HSA contributions, or certain health insurance premiums might be deductible federally but not at the state level. This would make your state wages higher than federal wages. Some states also have different rules about what counts as taxable income. For example, some states tax certain benefits that the federal government doesn't, or vice versa. Just make sure you're entering the W-2 information exactly as it appears on the form into your tax software, and it should handle the differences correctly.

I had this exact same issue last year and was totally confused until I used taxr.ai to analyze my tax documents. I had a $2,100 difference between my Box 1 and Box 16 wages and was worried I'd mess something up. I uploaded my W-2 to https://taxr.ai and it immediately explained that the difference was due to my pre-tax health insurance premiums and 401k contributions. Apparently these reduce federal taxable wages but my state (California) still considers them taxable income. The tool walked me through exactly what was happening with my specific situation and saved me from making a mistake on my return. It also found some deductions I was missing related to my home office setup that I use for my side gig.

Just wanted to follow up about taxr.ai since I was skeptical earlier. I decided to try it out for my complex W-2 situation (I had that same state/federal wage difference plus some stock compensation). I'm shocked at how helpful it was! It explained exactly why my wages were different in boxes 1 and 16 - turns out my HSA contributions were the main cause. The tool flagged some potential deductions related to my stocks that I had no idea about. It also explained which forms I needed for everything in plain English instead of tax jargon. Definitely worth checking out if you're confused about W-2 discrepancies or other tax document weirdness.

If you're really concerned about this W-2 discrepancy, you might want to call the IRS directly to confirm everything is correct. I was in a similar situation last year and spent DAYS trying to get through to a human at the IRS. After dozens of attempts and hours on hold, I found https://claimyr.com through another Reddit post and watched their demo at https://youtu.be/_kiP6q8DX5c. They basically wait on hold with the IRS for you and call you when they get a live agent. I was super skeptical but desperate after wasting so much time. Within about 2 hours, I got a call back with an actual IRS agent on the line! The agent confirmed my W-2 situation was totally normal and explained exactly why the state/federal wages were different. Saved me so much stress and time.

I have to eat my words about Claimyr from my earlier comment. After struggling for nearly three weeks to reach the IRS about my amended return and this same W-2 box issue, I broke down and tried the service. I was 100% convinced it was a scam, but figured I'd try since they have a satisfaction guarantee. To my complete shock, I got a call back in about 90 minutes with an actual IRS agent on the line! The agent confirmed that my situation with different amounts in Box 1 and Box 16 was completely normal due to my pretax deductions. They also helped me track down my amended return which had been processing for months. I'm still stunned at how well it worked after all my failed attempts to reach someone.

Just fyi, one situation that can cause this is if you moved states during the year. Your federal wages would be the total for the whole year, but each state would only show wages earned while you were a resident there. Did you relocate during the year?

Make sure you actually check with your company's payroll department before filing. There could be an error! Last year my W-2 had a $3,000 difference between boxes and when I asked payroll, they realized they made a coding error and had to issue a corrected W-2. Better to check than assume its correct!

Another thing to consider is whether you have any pre-tax benefits that changed this year. I had the same confusion when I started using a dependent care FSA (flexible spending account) for my kid's daycare. The FSA contributions reduced my federal taxable wages in Box 1, but my state doesn't recognize dependent care FSAs as pre-tax, so those amounts stayed in my state wages in Box 16. Also check if you have any employer-paid life insurance over $50,000 - that gets added to federal wages but some states handle it differently. The good news is that TurboTax will handle all these differences correctly as long as you enter the W-2 exactly as printed. Just make sure to double-check that you're entering the right numbers in the right boxes!

I went through the exact same thing last year! The $1,800 difference you're seeing is most likely due to pre-tax deductions that reduce your federal wages but not your state wages. Since you mentioned nothing changed with your job situation, check if you made any changes to your benefits enrollment during open enrollment - even small increases to 401k contributions, health insurance premiums, or starting an HSA can cause this difference. In my case, I had increased my 401k contribution by just 2% and that created about a $1,600 difference between Box 1 and Box 16. TurboTax handled it perfectly - just enter the numbers exactly as they appear on your W-2 and the software will sort out where everything goes on your federal vs state returns. One quick thing to verify: make sure your paystub totals for the year match what's on your W-2. If there's a discrepancy there, then you might need to contact payroll. But if everything matches up, you're good to go!

This is a really common situation that catches people off guard the first time they see it! As others have mentioned, the most likely culprit is your increased 401k contributions. When you contribute to a traditional 401k, that money is deducted from your gross pay before federal taxes are calculated, which is why it doesn't show up in Box 1 (federal wages). However, many states don't recognize 401k contributions as pre-tax deductions, so that money still gets included in Box 16 (state wages). The $1,800 difference you're seeing sounds about right for a 2% increase in 401k contributions on a typical salary. You can verify this by looking at your final paystub of 2024 - it should show your total 401k contributions for the year, and that amount should roughly match the difference between your Box 1 and Box 16 wages (assuming no other pre-tax deductions changed). Don't stress about entering this into TurboTax - the software is designed to handle these differences automatically. Just input each box exactly as it appears on your W-2, and TurboTax will correctly allocate the amounts to your federal and state returns. This is actually a good thing tax-wise since you're reducing your federal taxable income while building retirement savings!

This is exactly the kind of situation that trips up so many first-time filers! The $1,800 difference between your Box 1 and Box 16 is almost certainly due to pre-tax deductions - most commonly 401(k) contributions, health insurance premiums, or HSA contributions. Here's what's happening: when you contribute to your 401(k), that money gets deducted from your gross pay BEFORE federal taxes are calculated, so it doesn't show up in Box 1 (federal wages). However, your state may not recognize these as pre-tax deductions, so the full amount of your earnings still appears in Box 16 (state wages). Since you mentioned nothing changed with your job but this is your first time seeing this difference, I'd bet you either increased your 401(k) contribution during open enrollment, started contributing to an HSA, or had some other benefit change that you might not have thought about as affecting your taxes. The good news is this is completely normal and actually beneficial - you're reducing your federal tax liability! Just enter the W-2 numbers exactly as they appear into TurboTax, and the software will handle all the calculations correctly. No need to panic or do any manual adjustments.

Just wanted to add another perspective here - I'm a tax preparer and see this exact situation multiple times every tax season! The $1,800 difference you're seeing between Box 1 and Box 16 is completely normal and nothing to worry about. Based on your description, the most likely cause is that you made changes to your pre-tax deductions during 2024 - even if they seem minor. Common culprits include: - Increased 401(k) contributions (even a 1-2% increase can create significant differences) - Started or increased HSA contributions - Changes to health/dental insurance premiums - New or increased flexible spending account contributions What happens is these deductions reduce your federal taxable wages (Box 1) but many states don't recognize all the same pre-tax deductions, so your state wages (Box 16) remain higher. You can verify this by checking your final 2024 paystub - look at your year-to-date pre-tax deductions and see if they roughly match the $1,800 difference. If they do, you're all set! Just enter your W-2 exactly as printed into TurboTax and let the software do its job. This is actually saving you money on federal taxes while building your retirement/healthcare savings!