topic 401k to IRA Rollover | NJ Source of Income Question in Retirement tax questions

401k to IRA Rollover | NJ Source of Income Question

tfn20 — Fri, 19 Mar 2021 21:01:52 GMT

In 2020, I rolled over my 401k to an IRA after leaving my employer (changed jobs). I received a 1099-R.

I was successfully able to enter the information and the rolled over amount is successfully getting excluded from my federal tax income (non-taxed income). There is an additional NJ specific question that comes up about the source of income.

For "Where is This Distribution From", the options are:

Military Pension or survivors benefits

Disability benefits

Three-year rule pension or 401(k) benefits

General rule pension or 401(k) benefits

None of the above

What should I be selecting if the distribution is a 401(k) that was rolled into a traditional IRA (non-Roth)?

Re: 401k to IRA Rollover | NJ Source of Income Question

TomD8 — Fri, 19 Mar 2021 21:17:52 GMT

See pages 3-6 of this NJ tax publication for an explanation of the three-year rule and the general rule:

https://www.state.nj.us/treasury/taxation/pdf/pubs/tgi-ee/git1&2.pdf

Re: 401k to IRA Rollover | NJ Source of Income Question

tfn20 — Fri, 19 Mar 2021 21:25:01 GMT

I will not be withdrawing from my IRA anytime soon (retirement is 10+ years away). Do I choose "General rule pension or 401(k) benefits" or "None of the above"?

From what I see, whatever option I choose here does not actually make it to my NJ tax forms (if I check the preview of the returns).

Re: 401k to IRA Rollover | NJ Source of Income Question

fanfare — Fri, 19 Mar 2021 22:24:51 GMT

the answer is "none of the above".

BUT

you shouldn't get that question for a rollover.

make sure you entered your 1099-R correctly.

Re: 401k to IRA Rollover | NJ Source of Income Question

tfn20 — Mon, 22 Mar 2021 17:39:30 GMT

I've double checked the inputs and everything looks right (screenshot below). Still getting the source of income question later on though.

Re: 401k to IRA Rollover | NJ Source of Income Question

rjnkmail — Sat, 24 Feb 2024 18:27:42 GMT

I did a 401K to Traditional IRA rollover this year (2023) and I got the same question in Turbo Tax. The instructions in Turbo Tax and at NJ Treasury were not very clear to me.

Since all my 401k contributions (i.e. the source distribution) were made after 1984, and thus tax deferred, should I be answering "none of the above" to this question?

Re: 401k to IRA Rollover | NJ Source of Income Question

AbrahamT — Mon, 26 Feb 2024 17:42:56 GMT

That is correct.

Re: 401k to IRA Rollover | NJ Source of Income Question

rjnkmail — Mon, 26 Feb 2024 20:05:07 GMT

Thank you!