Retirement tax questions

First of all let's go to IRA withdrawals in the State of NJ website. In the section with the heading Ira Withdrawals, it says, "There is an exception to the taxability of an IRA withdrawal when the IRA funds are invested in obligations that are exempt from New Jersey Income Tax. The Gross Income Tax Act specifically excludes from income:

 • Interest received from obligations of the State of New Jersey or any of New Jersey’s political subdivisions; and

 • Interest received from direct federal obligations. This would include interest received from IRA distributions even though this isn't specifically mentioned in the website. This is our cited source to exclude this interest."

Now are you ready to exclude this interest? 

1. Go to the State Tab in your Turbo Tax product.
2. As you navigate in the program, you will see a section that says Other Non-Wage Income
3. Make an entry within this section such as Excluded US obligation Interest Within IRA Distribution and then record it with a minus sign in front of it. See the screenshot at the end of this post.

Make sure you have the proper documentation that reports this amount just in case if NJ Dept of Revenue has questions.. It is usually found in a supplemental form that came with your 1099R to show how you reported this plus the citation from the website I provided above.  Here is the screenshot.

@JR999