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Presterjohn1118
Level 2

Why am I getting taxed on distribution of Roth IRA

I have received 1099R this year for removing excess of $3334 on 2018 roth ira contribution. While I was doing 2018 amended tax return for New Jersey, I have noticed my income for 2018 went up by $3334 and I am being taxed for the distribution of $3334 instead of $144 of earning. Is this correct? This was not the case with the federal return

6 Replies
fanfare
Level 15

Why am I getting taxed on distribution of Roth IRA

"Is this correct? "

 

No, it's not.

Since you'll be filing on paper anyway, just do an override.

fanfare
Level 15

Why am I getting taxed on distribution of Roth IRA

you didn't say if you are Online or Desktop.

You didn't say what your 1099-R codes are.

Presterjohn1118
Level 2

Why am I getting taxed on distribution of Roth IRA

I am filing with the software. 1099R code is PJ. 1. Gross distribution: $3334 and 2a Taxable amount: $144.21. So my taxable income should be $144.21, not $3334 for New Jersey? I thought maybe NJ had different Roth IRA law compare to the Federal law.

fanfare
Level 15

Why am I getting taxed on distribution of Roth IRA

amending with TurboTax can be tricky.

I never tried to amend a state return with TurboTax.

I can't tell you why the program did not carry the same amount from federal to State.

 

As the supposedly primo tax software product, TurboTax seems to have a lot of problems in many areas.

fanfare
Level 15

Why am I getting taxed on distribution of Roth IRA

@dmertz just commented on this elsewhere but that was on the Federal side, not State.

dmertz
Level 15

Why am I getting taxed on distribution of Roth IRA

It was the federal early-distribution penalty on the taxable portion of a code PJ distribution that I addressed recently.  A far as I know, California is the only state with an early-distribution penalty.

 

I don't see any reason why TurboTax would include in NJ income any more of the amount on a code PJ Form 1099-R than is included in income on the federal return.  To appear in NJ income, any amount beyond the amount in box 2a of the code PJ Form 1099-R would have to be an addition to federal income and I can't see TurboTax doing that, but I don't have the NJ module to test with.

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