You will enter any taxable amount of those prior year recoveries as a "State/Local Tax Refund". In "Wages & income" navigate to "Other common Income" and "Start/Revisit" the "Refunds from State/Local returns" topic.
You will enter year's refund separately. Enter the total state/local refund you received from NJ for one of the years. That amount should include not only anchor payments but state income tax refunds as well.
Continue and done.
This will bring up another page where you will enter the taxable amount if any of those refunds. You will use Publication 525, Worksheet 2a, to figure the taxable amount if any. Generally, if the total refunds for the year do not exceed the 10,000 SALT they will not be taxable.
Repeat for the next tax year refund.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
