Where on the NJ State Return do you adjust for a withdrawal due to an excess contribution to a traditional IRA that was returned in the same year?

[cacarson12]

Currently Line 19a is reporting this as taxable.  The withdrawal is not taxed on the federal return.  See details.

I made an excess contribution of $6500 to a traditional Rollover IRA in 2017.  The excess amount was returned in 2017, but only $6414, resulting in a $86 loss.  The 1099 R - Box 1 = $6414 and Box 7 = "8".  Although the Federal 1040 does not tax me on the $6414, the NJ 1040 is treating it as a withdrawal and taxing me on it.  

Two questions:

1. Does NJ tax you on the return of excess contributions.  The Fed does not.
2. What adjustment do I need to make in either the NJ 1040 or Fed 1040 to avoid being taxed on the NJ 1040?

[fanfare · Accepted solution]

You neglected to put Yes, for the IRA checkmark in Box 7.

[cacarson12]

Thank you for your assistance; however I am not sure where you are referring to.  Do you mean on the Federal return when you are entering the 1099- R information or on the NJ Return?  I don't see a place to check a "Yes".  Please assist.

[fanfare]

all tax documents are entered in the Federal section and information flows to the state returns.
Your 1099-R has the IRA box checked; you must tell TurboTax that.
I don't remember the exact prompt that is used by the program.

[fanfare]

go back to the 1099-R and click Update and Edit.

[cacarson12]

I am in the Fed return now.  On the 1099-R, Box 7 = 8, and I checked "IRA/SEP/SIMPLE.  Is there something else I should be checking as the NJ is still making this taxable.

[fanfare]

are you saying you had already entered it as checkmarked ?

[cacarson12]

My 1099-R has a "X" in the IRA/SEP/SIMPLE BOX. So I have that entered in TurboTax. If I uncheck that box, then the withdrawal is not taxable on the NJ return. I am not sure that I should uncheck the box.

[fanfare]

what is your taxable amount in box 2a  ?

[cacarson12]

Yes.  I already had the check mark.  Is there a problem with TurboTax

[cacarson12]

Box 2a = 0

[cacarson12]

The fed 1040 shows the amount as non-taxable

[cacarson12]

The Box 1 amount ($6414)  is getting carried forward to the NJ return as being taxable

[fanfare]

I hear you ! I tried this in another tax program and got the result you're looking for, No tax in Fed or NJ.
I'm not sure what the issue is with TurboTax.

[cacarson12]

So your saying it might be my version of TurboTax?  If so, who can I contact?