Why are my Federal wages lower than my State wages

If your Federal wages are lower than your state wages, please ask your employer for the reason for this. You may receive a second income document from the same payer, usually a 1042-S form, which will report the remaining Federal wages, so the total would be equal to the State wages.

After that, you'd have to choose as a reason for the difference 'Income reported as exempt under tax treaty on a 1042-S, or reported on another page of the same W-2', then check ''Income reported as exempt under tax treaty on a 1042-S form' if the income reported on the second income document is exempt from a tax treaty. If not, you'd have to choose 'Income not reported as exempt on a 1042-S form'.

If the difference comes from another source, you can select 'Other exempt income'.

If you have worked in more than one state, your employer will enter the wages reported to each state in your W2 form, however that doesn't mean those are the actual wages you've physically earned in each state.

Below the W-2 form you will be asked to allocate your State wages between the two states you've reported in the W-2 form. Please enter the exact amount you've physically earned in each state the sum of which have to match the amount in box 1 Federal wages.

Please do not change the W-2 form filled in Sprintax, only distribute the wages in the boxes below the form. You can review your pay slips in order to calculate the amounts or ask your employer for further assistance.

Please be careful and make sure that you are aware of the exact reason for the difference as answering incorrectly on Step 3 - Let's talk money - W-2 might later on affect the tax calculations on your Federal and State tax return. 

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