Hello,
I withdrew contributions only (no earnings) from my Roth IRA in 2023 and 2024. I have had the account for more than 5 years. NJ state return is treating this as pension income. In Turbo tax it is asking for the following information:
2023 unrecovered contributions: What is expected here - the total amount of all contributions life to date in the roth as of the end of 2023 or just for 2023?
Amount withdrawn in 2023: I entered the amount.
Taxable portion of 2023 withdrawl: What is expected here?
Thank you,
It depends. For unrecovered contributions, it's asking for the total amount of basis remaining in your account in 2023. This is the total amount you have contributed to the account that has not been distributed. This does not include earnings that have accumulated in your account during its lifespan but only the amount that you contributed that remained in the account.
If in 2023, you were outside of the 5-year holding period the only taxable amount in the 2023 withdrawal would be the earnings that were distributed in 2023.
NJ Worksheet C and the associated TurboTax process does not apply to Roth IRAs, only Traditional IRAs.
You need to ignore, defeat or bypass those questions.
The NJ taxable amount is the same as the federal taxable amount.
Another user posted the same question.