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W-2 Difference in Federal and State wages (Tax Treaty exemption)

Generally, your Federal wages (box 1) and State wages (box 16) should be equal. If there is a difference between these amounts and the reason for that is 'Income exempt under a tax treaty' you should receive a second income document that reports the exempt portion of your income. In most cases, that kind of income document would be the 1042-S form with code 20 in box 1. If you do not have such document yet your Federal wages are less than your State wages, please contact your employer and confirm that matter with them. 

If that case applies to you, here is an example of how to report your W-2 in Sprintax (Step 3 - Let's talk money):

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As you can see there is a difference between box 1 and box 16. If you have a second income document that reports the exempt portion (in most cases that'd be 1042-S), you can select 'Income reported as exempt under tax treaty on 1042-S':

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Right afterwards, you will need to also upload your 1042-S form in Sprintax in order to report the amount that is exempt.

Important: Please make sure to confirm with the payer of your income where the difference from your wages comes from as it's important for the accuracy of your tax return.

Info: If the difference is not coming from a tax treaty, please click  here.

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