NYC withholding on the tax form does not match the withholding statements or references an invalid locality.
Explanation:
This error occurs when:
The New York City (NYC) withholding amount reported on the tax return does not match the sum of NYC withholding amounts on the taxpayer's W-2s.
The locality code or name entered is not valid or not recognized for NYC taxes.
Possible Causes:
Mismatch of Withholding Amounts:
The NYC withholding amount entered on the return is different from the total NYC withholding amounts reported on all W-2 forms (Box 19).
Missing or Incorrect W-2 Data:
NYC withholding from one or more W-2 forms is missing or was entered incorrectly.
Invalid Locality Name or Code:
The locality name or code entered on the return does not correspond to "New York City" or is left blank.
Incorrect Allocation:
NYC withholding is being incorrectly claimed for non-NYC income or for a taxpayer who does not reside or work in NYC.
Solution Steps:
1. Review W-2 Forms:
Check Box 19 on each W-2 form for any NYC withholding.
Verify that the locality in Box 20 corresponds to "NYC" or "New York City."
Sum up all NYC withholding amounts across all W-2s and ensure this total matches what is entered on the return.
2. Correct Data Entry on the Tax Return:
Go to the section of the return where NYC withholding is reported.
Enter the correct total of NYC withholding as reported on the W-2 forms.
Make sure the locality is correctly entered as "NYC" or "New York City."
3. Fix Invalid Locality Names or Codes:
Check the locality name or code entered on the tax return. It must match one of the following:
"NYC"
"New York City"
Do not leave the locality field blank.
4. Confirm NYC Residency/Work Eligibility:
NYC withholding should only be reported if the taxpayer:
Resided in NYC for part or all of the tax year, or
Worked in NYC and NYC withholding was deducted from their income.
If the taxpayer does not qualify, remove NYC withholding amounts from the return.
5. Check for Employer Errors:
If the NYC withholding amounts on the W-2 seem incorrect:
Contact the employer to verify the amounts reported in Box 19 and locality in Box 20.
If there is an error, request a corrected W-2 (Form W-2c).
6. Recheck Tax Software Calculations:
Ensure that all W-2 forms are entered accurately into the tax software.
Verify that the software is summing the NYC withholding amounts correctly and that no duplicate or missing entries are causing the discrepancy.
Example:
W-2 Box 19 (NYC Withholding): $500
W-2 Box 19 (NYC Withholding from a second W-2): $300
Total NYC Withholding Reported on Tax Return: Must