NJ Worksheet C is confusing and tedious and requires a deep understanding to file correctly.
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.
You will need good records showing what you (or the original owner, if inherited) put in over the years, or some way to reconstruct that information.
TurboTax doesn't handle the situation where your IRA and your inherited IRA both have a basis and you take a distribution from both.
