Reading boxes 15 to 20
Box 15 lists the state and the employer's state ID. Box 16 shows wages taxed by that state, and box 17 shows the state income tax withheld. Boxes 18 to 20 repeat the pattern for a local tax: local wages, local tax withheld and the name of the locality, such as New York City.
If an employer withheld tax for two states, there will be two lines. A city line appears only when the employer withheld city tax, so it may be blank for a New Jersey resident who works in the city.
Why box 16 can differ from box 1
State wages can be higher or lower than federal wages. Pre-tax benefits that reduce federal wages may be treated differently by a state, and part of your pay may belong to a different state. Seeing different numbers does not mean the W-2 is wrong, but it is worth a quick look at why.
If two lines show wages that add up to more than your total pay, ask payroll to explain before you file.
Live in NJ, work in NY
A New Jersey resident who works in New York generally files a New York nonresident return for the wages earned there and a New Jersey resident return for all income. New Jersey then allows a credit for tax paid to the other state, claimed on a New Jersey schedule for credit for taxes paid to other jurisdictions.
The credit is limited, so you may still owe the difference if one state taxes more than the other. Days spent working from home can change which state counts the pay as earned, so keep a day count if you split your week.
Moved during the year
If you moved from one of these places to the other, your employer may have changed the state it withheld for partway through the year, or may not have changed it at all. Compare the box 17 totals with where you actually lived each month.
A correction is usually made on your own return, by reporting the right split between the two states. Ask your employer for a corrected form only if a box is wrong in a way the return cannot fix.
Entering it correctly
Match each box to the state return it belongs on. State wages and withholding go to the matching state, and city wages and city tax go to the city part of the New York return. A single mismatched box can turn a refund into a balance due.
Kestrel Tax can read a W-2 PDF and pick up the state, local tax and locality name from boxes 15, 19 and 20, then ask you to confirm them. Treat any import as a draft and check it against the paper form.
Keep your W-2 copies
Keep every copy and the final pay stub of the year. They show year-to-date state and city withholding, which is the quickest way to check a box that looks off.
Common questions
Why is there no city tax on my NJ-resident W-2?
City income tax applies to city residents, so an employer normally withholds it only for them. A nonresident usually has none.
What if box 17 is blank but I worked in New York?
The employer may not have withheld. You may still owe nonresident tax on the pay earned there, so file based on where the work was done.
Can I get credit for both states' tax?
The home state usually gives a limited credit for tax paid to the other state. The rules and limits are in each state's instructions.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.