On a Pennsylvania return, the PA wages from box 16 of the W2 are not flowing to the return

When your W2 PA wage information differs from federal wage information, the W2 Reconciliation worksheet, PAW2RWK, is used to reconcile Federal, Medicare, and PA wages to figure the amount of compensation to carry to the PA return.

When there is a difference between the PA State wages and the Federal and Medicare wages that cannot be explained from the data entered on the W2 box 16, the PA W2 Reconciliation Worksheet is required by PA. When needed, the software automatically generates this PAW2RWK worksheet. If this worksheet is produced, it is included in the e-filed return. If the amount entered on the W2 screen, box 16 is not being carried to the PA return, a note is produced.

The amount entered on screen W2, box 16 for PA wages will automatically be carried to Form PA40, line 1. To change this for a single return,

1. Go to the PA > W2WK screen.

2. Enter the W2 Number that is being overridden at the top left.

3. Check the applicable override box(es):

   • Do not pull Drake's adjustment to line 9

   • Do not pull Drake's adjustment to line 18.

4. Enter the adjustments you believe are necessary to more accurately report Pennsylvania source wages income.

Your election will override both the Drake Tax calculated amounts and the W2 box 16 amounts, allowing you to report the PA compensation amounts as needed.

Additional Notes:

• The software normally produces the PAW2RWK in situations that may result in an inquiry from PA to the taxpayer. If you disable the worksheet, and the taxpayer later gets a PA inquiry, you can turn the worksheet back again to complete it. You still must explain the differences.

• Review the PA-40 instructions for details.