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It could be differential wages. See #38 below. This from an IRS page:

Yeah, I thought about, but my understanding is that with respect differential wages that the payments and the W-2 comes from the employer while the employee is on active duty.

No clue from me Mr. Yardley. Can't imagine any scenario where Medicare wages would be less than taxable wages. I believe it to be a mistake. W-2 probably was issued from the gov't office in Indianapolis. Wouldn't be the first mistake.

Yes, I have 1 where the differential was due to combat zone pay and another I assumed was active duty non combat zone.

When congress first started drafting the new tax law, almost all itemized deductions were taken away (only charities and maybe mortgage interest left I think). The higher standard deduction was supposed to make up for it. (At that point in time no one realized that the loss of exemptions would eat up the increased sd.) Then the lobbyists came out in force, they needed this, needed that. Congress was in such a rush to give the American people a "big Christmas present" that they just gave the loudest voices what they wanted. The result is that most deductions were put back in and, instead of being revenue neutral, the tax cut is adding trillions to the deficit. Misc 2% deductions and casualty and theft losses were the only things dropped, although taxes and mortgage interest were limited for some taxpayers while contribution limits were raised. The point is that the intent was to do away with most itemized deductions, but the result was to put most things back in in haste. I live in a high tax state that is suing the feds over this. CT tax is based on federal AGI, itemized deductions don't count. The state's participation in the suit therefore must center on state residents missing out on their federal taxes because they pay so much in state taxes. Some states that do allow itemization can and have upped the amount of state taxes their residents can deduct. I'm with Jack on this one. These states are claiming that the federal gov't is harming their residents, when the harm is coming from the states themselves that impose such high taxes on their residents.