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NJ Nonresident IRA Withdrawal tax

I'm a nonresident of NJ (live in Florida last 20 years), but have to file a nonresident tax return due to sale of property in NJ.  Here's the issue.  When Turbotax transfers the info from the Fed return, it includes withdrawals we made from our IRA.  The NJ Nonresident return says to include income from "everywhere" in Column A and then NJ income in Column B.  Therefore sale of property plus IRA withdrawal is listed in column A and only sale of property in column B.  You then determine percentage of income in NJ and apply that to the tax owed.  Here is the problem.  TurboTax has a column that you can check next to each IRA withdrawal if "non taxable in NJ".   Since I live in FL and I heard there was a law that says another state (NJ) can't tax a person's IRA withdrawals (or pension) when you are not a resident, should I check the box or not?  Not checking the box and even listing "0" in Column B for IRA withdrawals, you get a higher tax then if you checked the box and it doesn't appear in Column A. 

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3 Replies
JosephF8
Expert Alumni

NJ Nonresident IRA Withdrawal tax

The IRA withdrawals are non taxable to NJ to the extent of contributions. The reportable amount on your NJ return is just the amount that represents earnings. Note: if you were a NJ resident when you began getting the distributions from the IRA AND you used the three year method to recover contributions the entire amount would be earnings. You likely will need to go through the IRA worksheet to determine the amount to include on the NJ return.

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NJ Nonresident IRA Withdrawal tax

Thanks for getting back to me.  Still not clear.  Since I was never a NJ resident at any time, I checked the NJ Taxation web site and it says if you are a non-resident, your pensions and IRA income is not subject to NJ Income tax.  The IRA/401K distributions and Pension is not from any NJ Income source, so I would figure that I check the box "not taxable" in NJ.  So am I correct to check the box and exclude it from the Column A for income?

NJ Nonresident IRA Withdrawal tax

The NJ taxation website has answered this question for you.

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