It seems like the general rule option is not woking for my 401 K , when I put in the taxable amt from the state NJ , it does not
change the tax , its the same as none of the above which is the higher tax . Only the 3 year rule seems to be working which I can not use .
Do you qualify for the general rule because you are age 75 or older?
If so, what age is reported with the software? In TurboTax Online, return to My Info in the upper left hand corner of the screen. Verify Birthdate that is reported.
You may qualify to allocate Total Employee Contributions (basis) under the General Rule. See IRS Publication 575 here.
Under the General Rule, you determine the tax-free part of each annuity payment based on the ratio of the cost of the contract to the total expected return. Expected return is the total amount you and other eligible annuitants can expect to receive under the contract. To figure it, you must use life expectancy (actuarial) tables prescribed by the IRS.
Who must use the General Rule.
You must use the General Rule if you receive pension or annuity payments from a:
More information
For complete information on using the General Rule, including the actuarial tables you need, see IRS Publication 939.