Massachusetts requires an additional review when the amount reported as Massachusetts state wages is greater than the amount reported as federal wages on Form W-2. To help prevent filing errors, the program will ask whether the state wage amount exceeds the federal wage amount.
Program Entry
Massachusetts Return → Basic Information → State Wages Exceed Federal Wages
Do Your Total State Wages Exceed Your Total Federal Wages?
If your total Massachusetts state wages are greater than your total federal wages, answer Yes.
Before answering Yes, review all Forms W-2 to verify they were entered correctly.
Common situations where Massachusetts wages may be higher than federal wages include:
- Contributions to certain retirement plans that are excluded from federal wages but taxable to Massachusetts.
- Employee contributions to retirement systems that receive different tax treatment for Massachusetts and federal purposes.
- Other payroll items that are excluded from federal taxable wages but included in Massachusetts wages.
When Should I Answer No?
Answer No if:
- Your Massachusetts wages do not exceed your federal wages; or
- The difference is due to an error in the W-2 entry.
If state wages are higher than federal wages unexpectedly, review the W-2 carefully before continuing.
How Does This Affect E-Filing?
The Massachusetts return may not be eligible for electronic filing until this question is answered.
Answering Yes confirms that the difference between Massachusetts wages and federal wages is correct and allows the return to continue through the e-file process.
Notes
- State wages higher than federal wages are not always an error.
- Review all W-2 entries before answering Yes.
- The amount reported in Box 16 of Form W-2 may legitimately exceed the amount reported in Box 1.
- If the W-2 was entered incorrectly, correct the W-2 information instead of answering Yes.