2025 is the first year when both my wife and I have withdrawn from our Roth IRA accounts and we are using the free version of TurboTax provided by Fidelity Investments (most probably premier?). We are filing as married filing jointly. We have (for each of us separately) provided information about our Roth conversions over the last few years. In both our 1099-R forms, box 7 has "T". Based on this, TurboTax is claiming that our withdrawals are qualified (non-taxable) for Federal purposes, but are fully taxable (meaning that the entire amount is taxable) for NJ state purposes.
This seems incorrect as the qualification rules Roth withdrawals for Federal and NJ State are identical. Also even if it is true that that some part of the withdrawal is taxable in NJ, it cannot be the entire amount. That seems obviously incorrect. I suspect that there is some way to answer the questions differently to get around this problem, but how? Please help.
