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Screen NJW2 - New Jersey Wages and Wage Allocations (1040)
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Overview
Use this screen to adjust wage amounts transferred from the federal W2 screen (for example, to add back to wages 403(b), 457, and Federal Thrift Savings Fund employee contributions and income earned by a resident from foreign employment) and to enter additional information for calculating nonresident wage allocations and Form(s) NJ-2450.
General Information
Information in this section transfers from the W2 Facsimile section of the federal W2 screen. The wages amounts as entered on the input screen are used to calculate the taxable wage on the Wage Worksheet. Taxable wage as calculated on the worksheet will be reported on the return. Nonresidents who need to allocate wage on the allocation worksheet will have the allocated New Jersey wage reported on the Wage Worksheet.
A reciprocal agreement between New Jersey and Pennsylvania results in no instate wages showing up on the New Jersey nonresident return, NJ1040-NR, when either the Pennsylvania resident return is attached or the
State of residency
field located in the NJNRPY screen is PA
. If wages should still be reported on the NJ1040-NR return, then use code 23
in Box 14
of the federal W2 screen to adjust for instate wages.Wage code
Military wages of a nonresident aren't considered New Jersey source wages. If you enter
2
, the wages are excluded from New Jersey source wages. If excluding the nonresident spouse of active duty military member serving in New Jersey, use the Explanation for wages excluded under the Military Spouse Residency Relief Act
field in the NJNRPY screen to enter the required explanation.Box 14 Wage Adjustments
Adjustment to federal W2 box 16 New Jersey wages for incorrect W2
New Jersey W2 should reflect the taxable amount in
16 State wages
where 15 State
equals NJ. If the wage amount reported in 16 State wages
needs adjustment, use the federal W2 screen, 14 Other
field and use codes 22
and 23
to adjust the wages. Code 22
will adjust the resident wages and code 23
will adjust the part-year nonresident wages. The adjustment may increase or decrease the wages already coded to New Jersey. If no amount in the 16 State wages column is coded to NJ due to other data entry limitations for preparation of other state returns, the amounts entered with code 22
and 23
will be the New Jersey wages. This input screen doesn't permit changing the amounts in these fields; if changes are necessary; make the changes in the federal W2 screen. W-2 income for a statutory employee reported on federal Schedule C is treated as wages for New Jersey purposes. If the taxpayer qualifies as a self-employed individual or an independent contractor, reduce the amount shown as New Jersey wages in the NJW2 screen by the amount reported in the NJC screen as business income by using the 14 Other
codes 22
and 23
. Enter X
in the Qualified as self-employed under New Jersey law
field in the NJC screen to include the amount in the Net profits from business
field on Form NJ-1040, Page 2 or Form NJ-1040NR, Page 1.Other reimbursements
These amounts reflect reimbursed expenses that can be excluded from W-2 reported wages for New Jersey purposes and were entered in the federal W2 screen in the statement window attached to the
Box 14 Other
field using code 4
and with a postal code of NJ
. Amounts that can be excluded include certain meals and/or lodging expenses, employee business expenses, moving expenses, commuter transportation benefits, and/or compensation for injuries or sickness. These amounts are transferred to the NJW2 screen and are excluded from wages for New Jersey on the Wage worksheet. This input screen doesn't permit changing the amounts in these fields; if changes are necessary; make the changes in the federal W2 screen. Use the Form W-2 reimbursements
statement window in New Jersey NJAdj screen to supply a statement detailing the amounts.Philadelphia Information to Calculate Credit for Tax Paid
Use this section to enter data to calculate the Schedule A Credit for Income or Wage Taxes Paid to Other Jurisdiction.
Excess Contributions Additional Information
This section is used to provide additional information needed to complete Form NJ-2450.
New Jersey UI / WF / SWF funds / disability insurance / family leave insurance
New Jersey UI / WF / SWF fund contributions, disability insurance contributions, and family leave insurance contributions withheld from wages should be entered in the federal W2 screen in the statement window attached to the
14 Other
field with a postal code of NJ
. Contributions are limited to the maximum per Form W-2. See Form NJ-2450 for the current limits. Excess calculated on Form NJ-2450 when amounts were withheld by more than 1 employer for the same taxpayer and the total exceeds the contribution limit. Federal Schedule A requires the amount reported as New Jersey UI/WF/WSF contribution to be split and partial reported on line 5 as income taxes and the remainder on line 8 as other taxes. A link is available in the tax subject index. Amounts entered in 14 Other
of the federal W2 with code 8
and code 39
will be added together and when necessary reported on the New Jersey Form NJ-2450 Employee's Claim for Credit for excess UI/WF/SWF, Disability Insurance, and/or Family Leave Insurance Contributions for Calendar Year 2025
.Nonresident Allocations
Nonresident wages earned partly inside New Jersey may be allocated based on days, volume of transactions, or other methods approved by the New Jersey Division of Taxation. A summary of the amounts calculated is reported on Form NJ-1040NR, Part IV, Allocation of Wage and Salary Income Earned Partly Inside and Outside New Jersey.
Allocation basis
Choose the method to be used to allocate the amount entered in the
Allocable amount
field: Days
, Volume of business
, or Other
. When using days, the total days, nonworking days, and days outside of New Jersey must be no more than 365.Total days or volume
If wages are being allocated on a days basis, enter the total days of employment. Enter 365 for a full-year nonresident who worked for this employer the entire year. If wages are being allocated on a volume basis, enter the total volume of wages to be used in the calculation.
Non-working days
Enter the portion of the "Total days" entered that are non-work days such as weekends, holidays, or vacations.
Allocable amount
Enter the amount of wages reported on the Form NJ-1040-NR as gross income (Everywhere) Column A wages. This needs to be no more than Gross wages everywhere from the New Jersey Wage Worksheet, line 6.