You will need to report the earnings on line 20a of Form NJ-1040. This is a little bit tricky, to do this you will need to enter the excess contribution amount in the contribution amount previously taxed during the NJ state return:
- On the “You've Finished Your New Jersey Return” click “Update” next to “Adjustments”
- Continue until you get “IRA Information” screen.
- Select “Yes, this was the first year of withdrawal from this IRA” enter the excess contribution for 2023 next to “Total of IRA contribution previously taxed”
"Use the New Jersey IRA Worksheet to calculate the taxable and excludable portions of a withdrawal from a traditional IRA or nonqualified withdrawal from a Roth IRA. If you make withdrawals from several IRAs in the same year, you can use a separate worksheet for each IRA, or you can combine all IRAs on one worksheet. Report the total taxable amount, and the excludable amount if you are a resident, on your tax return. You can use the IRA Worksheets that appear in the New Jersey Income Tax return resident or nonresident instruction booklets. Do not file the IRA Worksheet with your New Jersey Income Tax return. Keep it for your Records." (NJ Retirement Income Understanding Income Tax page 12)
@BCAR
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