geilcourt
New Member

State tax filing

But wait, my wife having retired (as a NJ teacher) in 2017, I see that her after-tax contributions she paid are NOT the first sums of money she's receiving in her pension, only a fraction of them. In fact, if the "Total employee contributions" amount is correct, then she'll be nearing 100 years old before she gets all the after-tax contributions back. The difference between the (box 1) "Gross distribution" and the (box 2a) "Taxable amount" is clearly the value placed in the box numbered 5 ("Employee contributions or insurance premiums").

 

I've seen this spelled out in various publications online, that your total after-tax contributions are returned to you over the next, say, 26 years or so (if your life expectancy is 26 years, then the "Total employee contributions" figure is divided by 26 and you get just 1/26th of it back each year (make sure you live 26 years or you will lose out!).

 

In my wife's case, her total contributions were $624.27 (according to the first 1099-R), so divide by her life expectancy of 21.7 years, and you get her current $28.80 tax-free allowance (the difference between her "gross distribution" and her "taxable amount" is indeed $28.80).

 

Look at your first 1099-R after retiring... it shows your actual (box 5) "Employee contributions...", but beware, this figure is ONLY shown on your first 1099-R. It's like pulling teeth, trying to find out later what that figure was (it's nowhere to be seen on MBOS).

 

Now the one thing that's also puzzling in all this, is that you say you paid AFTER-TAX contributions to NJ, but that supposedly hasn't been the case since January, 1987 (TPAF Member Guidebook)! And as far as I can make out from her pay stubs, hers DO appear to have been almost all after-tax. And yet, the Office of Client Services letter she got from the (NJ) Division of Pensions and Benefits states that her "contribution to the pension plan was $109,756.15 (it doesn't confirm whether this was pre-tax or post-tax).

 

No wonder we're all confused! And the NJ taxation amounts go through conniptions every time you try a different rule setting!