Thank you @DaveF1006 however NJ states it would treat it as the Fed would. The Fed is not taxing it since the money withddrawn was initial, already taxed principal. One of the benefits of a Roth IRA is you can with draw your prinicipal tax and penalty free. The NJ website states it treats it as the Fed does and that should be non taxable income. So I believe there's a flaw with Turbo Tax as NJ should not be taxing it just as the Fed is not taxing it. Worst case, I will file with an accountant manually and stop using TurboTax (unfortunately).
