I received roth ira distribution. 1099r shows it code J but it is qualified because it as all contribution, not earnings. Turbo tax is taxing it. How do I fix this?

[mjmcgillick]

I’m having this issue…any luck getting it resolved I could sure use some help

[Tnbwills]

@mjmcgillick @As it turned out I did owe the penalty tax (ugh) due to the type of account it was withdrawn from. However, I was advised to just check the “other” box as a fix  and when I did that the amount penalty tax was removed. Good luck to you! 

[DanaB27]

You need to enter your Roth IRA contributions under net contributions in the follow-up questions:

1. Click on "Search" on the top and type “1099-R” 
2. Click on “Jump to 1099-R” and enter all your 1099-Rs
3. Click "Continue" on the "Review your 1099-R info" screen after you entered all you Form 1099-R
4. Answer "Owned Any Roth IRA for Five Years?" screen
5. Continue through the questions and make sure you enter the net contributions prior to 2024 on the "Enter Prior Year Roth IRA Contributions" screen
6. On the "Any Roth IRA Conversions?" screen answer "Yes" if you made conversions before 2024
7. Continue through the questions.

@mjmcgillick 

[mjmcgillick]

Thank you. I did fill out that section for the federal return with no issue.

I live in NY, but make some money in New Jersey so I have to file for NJ as well. On one screen for NJ filing, it states “Roth distributions with the code J or T in box 7 are taxable in New Jersey. If this is not correct for your situation, you must have the 1099-r reissued. I then have to enter my Roth distribution amount, and it tallies it as income however it’s not stating I owe taxes on it…I don’t understand why they’re even asking about it because I’m filing as a nonresident. 

[DaveF1006]

Since you’re filing as a nonresident in New Jersey, your Roth IRA distributions generally should not be subject to New Jersey income tax. New Jersey has special tax rules for IRA distributions. The system may still ask for the amount to see if any portion is taxed.

New Jersey typically taxes only the portion of a distribution that exceeds previously taxed contributions. For Roth IRAs, distributions are generally tax-free if the account is at least five years old and you’re over 59½. Since you’re a nonresident, your pension, annuity, and IRA income should not be subject to New Jersey tax. The system may be asking for the amount to verify whether any portion qualifies as taxable income under state rules.

If the software thinks it's money but doesn't tax it, it's probably just a report requirement instead of a real tax liability.