turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Attend our Ask the Experts event about Deciphering Your Tax Forms on Feb 19! >> RSVP NOW!
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

clarzt
New Member

I have NJ state pension and do not yet have to pay state taxes because I have not recouped the amount I already paid taxes on. How is this reported?

 
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions
IsabellaG
Employee Tax Expert

I have NJ state pension and do not yet have to pay state taxes because I have not recouped the amount I already paid taxes on. How is this reported?

After you enter your 1099-R, you'll encounter a screen that asks Where is this distribution from. If you qualify, check  
Three-year rule: You may use this method if you will recover all of your contributions to the plan within 36 months from the date you receive your first payment from the plan, and both you and your employer contributed to the plan. Benefits based on your contributions are not taxable in New Jersey, but benefits based on your employer's contributions are fully taxable.

When using the Three-year Rule Method, your pension is nontaxable until the payments you receive from the plan equal the amount you contributed. Once you have received an amount equal to your contributions, all payments from the pension plan are fully taxable.

When you go to your state return, you will reach a screen Three-Year Rule Method where you'll be able to enter the amount your annuity cost, and how much of the cost you've recouped so far.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

1 Reply
IsabellaG
Employee Tax Expert

I have NJ state pension and do not yet have to pay state taxes because I have not recouped the amount I already paid taxes on. How is this reported?

After you enter your 1099-R, you'll encounter a screen that asks Where is this distribution from. If you qualify, check  
Three-year rule: You may use this method if you will recover all of your contributions to the plan within 36 months from the date you receive your first payment from the plan, and both you and your employer contributed to the plan. Benefits based on your contributions are not taxable in New Jersey, but benefits based on your employer's contributions are fully taxable.

When using the Three-year Rule Method, your pension is nontaxable until the payments you receive from the plan equal the amount you contributed. Once you have received an amount equal to your contributions, all payments from the pension plan are fully taxable.

When you go to your state return, you will reach a screen Three-Year Rule Method where you'll be able to enter the amount your annuity cost, and how much of the cost you've recouped so far.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question