If you received a 1099-R for a distribution from an inherited IRA, when you enter it in the Income > Retirement Plans section, TurboTax asks if the IRA is inherited.
You are asked in the follow-up questions, if all or part of the distribution is RMD. You can indicate 'all' and enter the RMD amounts as the amount received (unless the distribution was in excess of the RMD).
You don't need to enter anything in TurboTax if you didn't take a distribution.
Here's more info on What is RMD?
However, if the IRA contained after-tax contributions, then there would be a 'basis' for the account, in which case you could use the same amount as calculated for inheritance tax. TurboTax supports New Jersey if you tell TurboTax your remaining original contributions, (in this case the owner's original contributions) and Inherited IRA year end value.
See Worksheet C in the NJ Resident Return Instructions for how to avoid double taxation on that money (i.e. recover it) when you withdraw from your IRA. There is a first year calculation, and then a calculation for all subsequent years. OR use TurboTax to do it, it is the same thing but in a different presentation.
Here's more details on Inherited IRA Basis.
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