New jersey retired teacher needs to exclude initial years pension payments. We can exclude what we paid into the plan i.e. employee contributions.

[null670]

how to enter NJ pension exclusion in state program?

[MaryK4]

In the FEDERAL TAXES section, after you enter the 1099-R, you will see the screen below where you can indicate you want to use the three year option, then the information will be transferred to your New Jersey state tax return.

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 aren't taxable in New Jersey, but benefits based on your employer's contributions are fully taxable.

[DeniseTwo]

To get the NJ pension exclusion, you have to start with the Federal section when entering the 1099-R:

In the Federal section, when entering the 1099-R, make sure there is something in box 9b Total employee contributions.  If it is blank, put in the contributions amount from the letter you should have received when you first started getting your pension (you will need to know this $ amount, contact your pension office if you do not have it).  This will trigger TurboTax to bring up the screens for the exclusion in NJ.  

You will need to fill out the Federal section first:  Pick the three year plan pension (even though I will not get all the amount back within 36 months, it is what I need to pick so that option goes to NJ return).  I fill in the start date, and the months I got the pension.  For the cost/contributions  (remember this is Federal) I put $0.  That makes the pension I rec'd all taxable.

Then for NJ, when you get to that section, it will already default to the three year calculation.  You put in the Annuity Cost (what you originally contributed, this will be the same each year) and the amount (if any) that you have recovered in past years. 

The non-taxable pension will not show on the summary screens.  If it is partially taxable, the total and nontaxable portions (subtracted) will show up.

Once you print your return, it shows up on NJ return, line 20b as non-taxable pensions deducted from income. 

Remember the qualifications:  Taxpayer (or spouse, whichever got the pension) is 62 or older, lived in NJ all year (prorated if not), state taxable income under $150,000 (prorated if income between $100,000 & 150,000).