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10911: NJ - Wage Amount Calculation


New Jersey

How is the New Jersey wages on line 15 (previously line 14) calculated?

NJ1040 and NJ1040NR requires the total of all state wages to be entered. Because Forms W2 issued in NJ often do not truly represent the allocation of total earnings, Drake Tax is unable to just pull the total of all box 16 entries.

After much discussion with NJ preparers, line 15 (previously line 14) will contain the LARGER of either:

  • Box 1, or 
  • Box 16 wages allocated to New Jersey only.

This, however, will not always be the amount needed. If you need a different amount on line 15 (previously line 14), enter it directly on NJ Screen 2, for the Wages Override line.

This method:

  • Prevents the doubling of income where the amounts keyed in box 16 for two different states are the same amount, causing the total to exceed federal.
  • Pulls the correct amount where NJ only wages exceed federal due to items that are nontaxable for federal purposes, but taxable for NJ purposes.

Alternatively, Setup > Options > States > NJ includes the option Include only wages from W2 box 16 coded for NJ on the NJ1040 Resident Return, line 15 (14) - Wages.


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