Turbo Tax is showing that my second year NJ pension distribution is taxable. How do I enter the correct information so it shows as NON-taxable in NJ?

[SweetieJean]

Were you age 62 or more on 12/31/2020?

[Rabble58]

Yes. I am having trouble understanding what the "basis" is for my pension, even after reading every explanation I can find. 

[Rabble58]

Yes. 

I am having trouble understanding what the "basis" is for my pension, even after reading every explanation I could find.

[fanfare]

You have a basis in your IRA as far as NJ is concerned because you did not deduct IRA contributions from your NJ taxable income in all those past years.

Those are unrecovered.

See Worksheet C in the NJ Resident Return Instructions for how to avoid double taxation on that money (i.e. recover it) when you withdraw from your IRA. There is a first year calculation, and then a calculation for all subsequent years. OR use TurboTax to do it, it is the same thing but in a different presentation.

You will need good records showing what you put in over the years, or some way to reconstruct that information.

HOWEVER, if the Retirement Income Exclusion eliminates your tax, the unrecovered calculation becomes moot.
You qualify for the pension exclusion if:

• You (and/or your spouse/civil union partner, if filing jointly) were 62 or older or disabled as defined by Social Security guidelines on the last day of the tax year (December 31 for calendar year filers); and
• Your total income for the entire year was $100,000 or less.

[fanfare]

The worksheet mentioned above applies only to IRAs. Not pensions.

[fanfare]

you pension and IRAs are taxable, 

and there is no exclusion if Line 27 on your return is above $100,000.

[Rabble58]

First, I asked about PENSIONS (in NJ), not IRAs. And second, our NJ income is LESS than $100,000.

I think I figured it out now, but am not 100% sure.

I believe that the basis amount I need to enter in Turbo Tax would be the amount of pension distribution I received in 2020 that was still a recovering of my employee contribution. If that is correct, I owe no NJ tax and I'm done. 

Can anyone confirm that this is the correct calculation?