We live in Massachusetts (full year resident 2008), but my wife works in Rhode Island. She received two W-2 statements from her employer: One with the standard Federal stuff and the state wage line with MA. She received a second W-2 with just the state information for RI. MA and RI have reciprocal tax agreements, meaning the state tax due in RI is credited against the MA taxes. If the state tax in RI is less that she would have paid if her income was earned in MA, then the difference is paid to MA.

The problem is that both W-2's show the full state wages for her. I believe the MA state wages should be zero on that W-2 since she did not earn any money in MA during 2008. I use one of the tax software packages, and it also throws up a warning about this when I enter the same amount for both states (per the W-2s). I believe the MA state wages should be zero since she did not work in MA. For example, in years past she worked part of the year in MA and part in RI - and the state wages in each showed the wages appropriately.

I'm trying to get confirmation that the MA state wages in the first W-2 should be zero. Her employer's payroll people are in Texas, and are not very knowledgeable (no state income tax there).

Thanks

If you have not resolved this, contact the Massachusetts state tax authorities for confirmation.

What you posted makes sense, but the MA state tax authorities are sticklers about such things, so getting confirmation from them makes the most sense.