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Level 3

State tax on after tax 401K distributions

After I retired in 2017 I transferred the money in my 401K to my IRA.  I also had some after tax money in the 401K which I took as cash.  When I made the after tax contribution I was living in NJ.  I now live in NC.  Do I need to treat the after tax dollars as income in NC?

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Level 6

State tax on after tax 401K distributions

Yes, you will report your distribution on your North Carolina state tax return.  However, you will not be taxed on this income as the original contributions made were after tax.  Your 1099-R should reflect that the cash you received is non-taxable.  But, this distribution needs to be reported on your federal and state returns.

See this TurboTax article Tax Tips for Retirement for more information.

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