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IRA withdrawal - part-year state resident

I am 70, moved from NJ to PA last spring, and after moving to PA made some withdrawals from a traditional IRA. I expected based on other posted discussions that I would not owe NJ state tax for withdrawals made after moving out of state. But on TurboTax it's coming up that nearly 95% of my withdrawals are still subject to NJ tax. As I entered the info in TurboTax, there was an item "Amount received and taxable during NJ residency", and a check-box for "Check if distribution is non-taxable in NJ". No matter what answers I give here (e.g., zero and checking the box), I'm still being taxed in NJ. Am I misunderstanding, or doing something wrong? Thank you.

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Accepted Solutions
DMarkM1
Employee Tax Expert

IRA withdrawal - part-year state resident

Okay.  Here is a workaround.  In "Forms Mode" go to the NJ Pensions Wks-TP.  Scroll down to part A and line 2a should be the amount you entered in the NJ box as NJ distribution.  If it is not, make it so.  The line 2a is supposed to flow from the total of column C above for part-year residents. 

 

@fusilli45   

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4 Replies
DMarkM1
Employee Tax Expert

IRA withdrawal - part-year state resident

You are correct.  Only the part of the pension received while resident in NJ would be taxable to NJ.  I am unable to duplicate your experience using the information provided. 

 

In my online version in the NJ interview on the page you described, the NJ tax is affected by the amount I enter in the box "Amount received and taxable in NJ".  Further, if I check the box "Not taxable in NJ" the NJ tax reduces as well.  When I continue further in the "Adjustment" section interview,  I arrive at a retirement summary page that reflects the amount I entered in the NJ taxable box earlier.  

 

Try signing out and clearing your browser cache.  Here is a link for assistance with that process, if needed.  

 

If the experience continues, repost with the TurboTax product you are using and the 1099R amounts/states showing on your form.  

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IRA withdrawal - part-year state resident

Thanks for the quick helpful reply. I did as you suggested, though I clear my cache regularly. I'm using TurboTax Premier, downloaded from Amazon a month ago.  My 1099-R lists my PA address, and says PA in box 15. Distribution code is 7, and the IRA SEP/Simple box is checked. 

On the box "Amount received and taxable in NJ" I indicate 0, and I check the box "Not taxable in NJ". But no matter what I put in these boxes, the NJ tax amount is unchanged! I see on a form that the calculation is being done as follows: multiply the withdrawal amount by "accumulated earnings on IRA as of 12/31/23" divided by "Total value of all IRAs", which comes out to about .94, so .94 times my withdrawal is over 60K, which is added to my NJ taxable income.

I'm stumped - any further thoughts?

 

DMarkM1
Employee Tax Expert

IRA withdrawal - part-year state resident

Okay.  Here is a workaround.  In "Forms Mode" go to the NJ Pensions Wks-TP.  Scroll down to part A and line 2a should be the amount you entered in the NJ box as NJ distribution.  If it is not, make it so.  The line 2a is supposed to flow from the total of column C above for part-year residents. 

 

@fusilli45   

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IRA withdrawal - part-year state resident

That seems to do the trick - thank you!

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