1040-US: Entering wages when processing a multi-state return

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How do I enter wage information when processing multiple-state returns?


In Screen W2, enter the appropriate postal code and the full amount of wages for each state in boxes 15 and 16, respectively. The resident integrated state picks up all wages. The nonresident states pick up only wages designated with the nonresident state postal code. Only the amount of state tax withheld you enter in box 17 transfers to the federal return from this section of Screen W2.

Data entry outlined above produces correct results for most states being processed. If one or more of the states being processed builds up wages, the amounts transferred may be too high. You may need to adjust amounts in Screen W2 for those states (California, Massachusetts, and Pennsylvania) that build up wages.

California note: The sum of all entries in the box 16 State wages fields in Screen W2 is included in California resident wages (and as resident wages for Schedule CA 540NR, if applicable). (Note that the State wages field may be blank for wages earned in some states, such as Nevada, Washington, and Texas.) Because all wages are taxable to the resident state, the calculation of California resident wages is limited to not less than the amount in the Wages, tips field. To include an amount less than the amount of California resident wages in the Wages, tips field, enter the amount in the UltraTax CS/1040-CA Screen CAAdj force fields. California-source wages for part-year and nonresident returns include only State wages entered with a CA postal code.

Video overview

The following video outlines the steps for allocating wages to nonresident state returns.

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