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mppsu2003
Returning Member

CARES Act - 401k withdrawal in New Jersey

I took a Cares Act withdrawal and elected to have it spread over 3 years on last year's return.  However, I could only do that for Federal and not for NJ, so the full amount was taxable in the state over 1 year.  Working on my return now, when I enter 1/3 for form 8915 for Federal it is also adding the tax burden to the state.  When I get to the NJ page it asks me if my withdrawal was for Covid-19 and if I elected to spread it over 3 years as one question...how should I answer this?  It was for Covid, and I did elect to spread it over 3 years but not in the state of New Jersey...again, the full amount of withdrawal appears as income on my 2020 state return.

 

How should I address this?  Should I list amount as 0?  How do I answer the question asked above?

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3 Replies

CARES Act - 401k withdrawal in New Jersey

when you get into the state return you have to answer that you did not spread it over three years, because you did not.

there should be no taxable distribution amount on your NJ return from COVID-related distribution.

mppsu2003
Returning Member

CARES Act - 401k withdrawal in New Jersey

I'm struggling with this one still.   I had the full amount for NJ on my return for 2020, but for Federal I spread it over 3 years.  I can't seem to fill out correctly in NJ.  When I say No to the question "Was this prior year distrubution due to Covid 19 and did I elect to have it included in New Jersey income over three years" then the next page indicates Gross Distribution of 24000 and Federal Taxable amount of 0, even though I included 8,000 on the federal return.   I'm not sure what i'm supposed to do with this

CARES Act - 401k withdrawal in New Jersey

Sounds like TurboTax has serious problems.

 TurboTax is buggy and getting worse not better.

 

What is your NJ taxable amount on line 20a? That is what counts.

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