I am retired, why do I owe NJ state taxes while I'm still in the 3-year rule period, & my husband is receiving only social security?

[IsabellaG · Accepted solution]

In the Federal section after you enter your 1099-R for your pension, you will see the screen Where Is This Distribution From? You will indicate that this pension is covered by the 3-year rule, and if you still haven't recovered your contributions to the plan, then enter the taxable amount of the pension, or zero if none of it is taxable yet. See the screenshot below.

Otherwise, if you have other income that is taxable in NJ that could result in you owing tax to the state.