It depends. If you had 401K contributions prior to 1984, NJ taxed your contributions and does not tax the distribution up to the amount of your contributions. When entering the form 1099R you will arrive at a follow on page titled "Where is your distribution from?" You have four options. Assuming your pension is not Military or Disability, you will need to select either the "Three-year rule" or "General Rule" to calculate how much of your distribution is taxable this year.
If you click on the "Learn More" link at the end of the first statement on the page, a detailed explanation of NJ pension taxation is presented. At the end of that help topic you will find a link (here) to the NJ Tax Bulletin that has a worksheet to help you decide which rule you should pick.
The Three-year rule will not tax any distributions for three years and then tax the rest of your distributions after that time. The General rule will tax a percentage of all your distributions. The worksheet in the tax bulletin will help you determine how soon you distributions will exceed your contributions.
For 401K contributions after 1983, your distributions are fully-taxable in NJ.
[edited 2/11/2023 12:18pm]
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