It depends. If you read the opening paragraph in the NJ link I sent, it says The New Jersey Income Tax treatment of Roth IRAs conforms to the federal treatment. Direct contributions to Roth IRAs are not deductible and qualified distributions from Roth IRAs are not includable in New Jersey income. This means that both these conditions need to be met to exclude this from NJ income to conform with the federal treatment. This is how this is interpreted.
Since this distribution is non-qualified, then it is taxable under the NJ tax code. I don't mean to argue this point with you but I must follow the language that is written in the code.
@silverdj
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