New Jersey, as you know, does not conform to federal tax law on HSAs.
A Qualified Funding Distribution from an IRA to an HSA is subject to the contribution limits on the state return, so I imagine it is treated the same in New Jersey as other HSA contributions - i.e., not tax deductible.
This means that the IRA distribution would be taxable in NJ.
I don't fully understand your question - can you rephrase it?
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