I had the same problem this tax year (2022). Turbo Tax online Fed form 1040 properly excluded the ROTH qualified distribution from income. However, the NJ-1040 included it.
I also changed the coding to a Q as suggested by GeorgeM777 but that is not a proper solution. Should not have to fudge the 1099-R.
TurboTax should explicitly ask if is is a qualified distribution and it should exclude the amount from the NJ-1040.
If you read the instructions for IRS Form 1099-R you will see that the custodian is instructed to code as T only if they cannot determine if the five year holding period has been met. (Table 1)
https://www.irs.gov/instructions/i1099r#en_US_2023_publink100021668
"Use Code T for a distribution from a Roth IRA if you do not know if the 5-year holding period has been met"
Additionaly, the NJ Div Tax website instructs NOT to include qualified ROTH distributions anywhere on the return. "A qualified distribution from a Roth IRA is excludable from income and should not be reported anywhere on the New Jersey tax return." https://www.nj.gov/treasury/taxation//rothira.shtml
In this case, it is up to the taxpayer to determine if it is qualified. Turbo Tax should explicitly give users the ability to stipulate qualified or not.
