For example and employee works and lives in NY and earns $80,000, then moves to Arizona and Earns $20,000. So his Federal Wages are $100,000. On the W2 it lists for Box 16 NY $100,000 and AZ $20,000. I am told that is because NY requires State Wages to equal Federal. Is that correct?

Yes. NYS doesn't want the employer to determine the wage that should be allocated to NY. It wants you or your accountant to allocate it when you file the NYS personal income tax return. See the publication at this link: http://www.tax.state.ny.us/pdf/memos/income/m02_3i.pdf

Yes. NYS doesn't want the employer to determine the wage that should be allocated to NY. It wants you or your accountant to allocate it when you file the NYS personal income tax return. See the publication at this link: http://www.tax.state.ny.us/pdf/memos/income/m02_3i.pdf

My company is based in Houston, Texas, but I am located in Wisconsin. Shouldn't my line 16 'State Wages' be the same as shown in line 1?

My W2 doesn't show anything in line 16. Is it OK?