To start, if all contributions to your 401(k) Plan were made on or after January 1, 1984, they were not included in income when they were made, unless the contributions exceeded the federal elective deferral limit and the full amount is taxable now.
The New Jersey three year method works if you will receive an amount equal to or greater than your pension and annuity contributions within three years (36 months) from the date you receive your first payment from the plan. If you are not yet receiving regular payments yet, it may or may not benefit you.
With the three year option, you can take any amounts you contributed untaxed instead of having to use a prorata formula.
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