Massachusetts W-2

[Bill Tubbs]

Have a couple from Massachusetts (and I am in Wisconsin so this will be the only MA return for me this year) that each have 1 W-2. One looks fine -- Box 1 = Box 16 {state wages} and Boxes 3 & 5 = Box 1 + 401(K) deferral. The other one looks a bit strange and hoping someone could shed some light... (numbers are approximate)

Box 1: 39k
Box 3 & 4: blank
Box 5: 44k
Box 16: 43k

In box 14: "Retirement 4k, Insurance 1k"

The employer is "Town of <town name>"

Any idea why the retirement is not included in the federal wages but is included in the state wages? Also, why the Medicare wages includes the Insurance amount?

I'm guessing the town is exempted from Social Security, which is why Box 3 & 4 are blank.

Thanks,
Bill

[taxmom34]

you are right in assuming that one with town is not subject to social security. however, the retirement income is added back into the state wages (that's why the difference) and now the retirement can be added to other social security for the $2000 (max) deduction. hope i was clear enough in my answer.

[Bill Tubbs]

thanks

Thank you taxmom... that's what I read but it wasn't making sense (do tax publications ever make sense?)

Bill