Can my rolled over IRA be taxed by Nj. Is the entire amount considered to be taxable income? If so, what happens with RMDs?

[windingman]

Will this income continue to be taxed by NJ, i.e. RMDs, withdrawn balances

[DanaB27]

No,  a rollover from a traditional IRA to another traditional IRA won't be taxable in NJ.

"The New Jersey Gross Income Tax Act does not contain any provisions similar to the Internal Revenue Code that allow an individual to deduct contributions to an IRA. Contributions to an IRA are subject to New Jersey Income Tax in the year they are made. When you make a withdrawal from an IRA, the amount you contributed is not taxable, since the contributions were already taxed." (NJ Division of Taxation)

Therefore, when you take RMD's only the earnings will be taxable.

[windingman]

I am still a bit confused, I inherited an IRA and I rolled it over into another simple IRA. The federal government does not consider this to be taxable income; however Intuit says that New Jersey considers the full amount to be taxable income. Is that correct and will I now have to pay taxes on the total amount that is in the rolled over IRA

[DaveF1006]

Clarification:  Did you inherit this from your spouse or somebody else?

[windingman]

Hi Dave, To answer your question, I inherited the IRA from my deceased brother.

[fanfare]

Dave asks, because :

An inherited IRA from a non-spouse cannot be rolled over into your own IRA.

[windingman]

Hi Dave: The federal government allowed me sixty days to roll over the inherited IRA, that isn't the issue, the problem is that according to intuit, New Jersey unlike the federal government says that the entire amount is taxable in the year that I inherited the IRA. What I am asking is that the case? Does the entire amount have to be declared in one fell swoop? Needless to say, the amount certainly would change my tax bracket for the 2021 tax year.

[fanfare]

New Jersey has an inheritance tax,

If you inherit from a brother or sister, any inheritance over $25,000 is subject to that tax of 11% on the value up to about one million dollars and it goes up from there.

If you, not the estate, paid inheritance tax, you can use that amount to offset NJ tax on the IRA distributions until you use it up.

[fanfare]

NJ is taxing you because you distributed the entire amount and moved the money elsewhere.

if you reported it as a rollover on Federal Form 1040, that is in error.

You can't rollover an Inherited IRA into your own IRA.