I left my previous employer (457b non government) in 2019 and elected to take my 457b over a three year period with the first distribution on 4/1/2020. State taxes where paid on the contributions. The employer did not make a contribution. The total contribution is known (for discussion let us say $100K), but the final distribution amount after three years will not be known as it is still invested. (Currently let us say, I received $50K in 2020 and currently $150K is left at the time of filing, but the market my change that amount over the next 2 years.) I am not retired. Fidelity which holds the 457b issued a W2, showing same wages ($50K) in boxes 1 and 16. They show some Fed tax and state tax withheld in boxes 2 and 17, but remember I did pay state tax on the contributions. NJ website states: Section 457 Plan distributions to nongovernmental employees continue to be reported on federal Form W2. (Not 1099R). TurboTax handles the Federal return without issue, but how do I handle the NJ State taxes? I figure I must use the General Rule of Accounting, since the employer did not make a contribution. From NJ tax site
Worksheet B
General Rule Method
1. Your previously taxed contributions to the plan ................................1.___________________
2. Expected return on contract* ....................................................................2.___________________
3. Percentage excludable (Divide line 1 by line 2) ..................................3.___________________%
4. Amount received this year ..........................................................................4.___________________
5. Amount excludable (Multiply line 4 by line 3.
Enter here and on Line 20b, Form NJ-1040) ........................................5.___________________
6. Taxable amount (Subtract line 5 from line 4.
Enter here and on Line 20a, Form NJ-1040) ........................................6.___________________
Did I use a different expected return on contract number depending on the remaining investment amount each year? Do I have to override TurboTax to get the numbers to work? Am I missing anything
