You are correct that your initial $20,000 can be rolled over with no taxes owed because it represents contributions that were previously taxes by New Jersey. TurboTax will create the Worksheets because you do have to keep track of the amounts that were taxed. After all the tax free contributions are taken out, you will pay New Jersey tax on the distributions that represent the earnings. See GIT-2 -IRA Withdrawals for more information.
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