@bigslimdog wrote:
I am replying to my previous post because I have learned more by studying how TurboTax filled out the New Jersey Git2 Worksheet C (IRA Withdrawals). In TT, the form is named "Pensions Wks". I see what it's doing, but I am still unclear how to proceed.
Line 1a is Value of all IRA's on 12/31/2021. I got this value from my custodian.
Line 1b is Contributions made for the tax year from 1/1/2022 - 4/15/2022. This is blank as I made none.
Line 1c is Value of all IRA's on 12/31/2021 and contributions made for the tax year from 1/1/2022-4/15/2022 (add lines 1a and 1b). For me 1a = 1c.
Line 2a is Total distributions from IRA during the tax year (do not include tax-free rollovers). This shows the amount of my corrective distribution. But critically this distribution was made 4/18/2022.
Line 3 is Total value of IRA(s) (add lines 1c, 1a, and 2b). For me, this is simply 1a+2a. But the distribution from line 2a is already included in the value of the IRA on 12/31/2021 (Line 1a). So the IRA value is artificially inflated by this summing. If the distribution were made in 2021, it would not be include in the 1a value, which seems to be the intent of the worksheet.
My intuition tells me that the correction distribution, which TT carried over from my federal return, was not actually "during the tax year". Yes, it is a 2021 corrective distribution at the federal level, but everything I have seen in the New Jersey tax literature leads me to believe that it is a (non-qualified) 2022 distribution in the New Jersey tax world. In this case, I believe I ought to be reporting no 2021 New Jersey IRA withdrawals, and should instead report it as a 2022 withdrawal next year.
My questions are, (1) is this all correct and (2) how can I fix this on my 2021 state return in TT?
Thank you for any insights.
Sorry but I know nothing about the NJ software or NJ tax laws.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
