Make sure you entered your 1099-R correctly in your Federal return.
You may want to Delete/Re-Enter it to get the proper screens to come up in this section after your entry.
Click this link for more info New Jersey Pension Exclusions.
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line 28 B of NJ 1040 does not appear to be calculating correctly. i.e. for a single person the amount should 75,000 less retirement/pension income from line 28A. It appears the program is subtracting all income.