I believe this is an error in TurboTax. According to what I’ve read, contributions to 401k are fully deductible in NJ. I caught this error while doing my taxes for 2023. I went back and found similar errors in 2022 and 2021. Since NJ assumes that all distributions from a 401k are fully taxable, I’d be paying tax twice on the same money. It’s an expensive mistake. I’m going to file an amended for.
