Life Insurance "Non-qualified"

Policy was cashed in. 1099=R. There are entries in boxes 1, 2a, 2b(total distribution is checked), 4, 5, and 7(code is 7). Federal form calculates income and tax correctly. The issue is that the " Excludable pension" value is carried over to NJ-1040 line 20b. The application for the Senior Freeze, PAS-1, requires any value in 20b to be included as part of Total income for PAS-1. The result can then become a higher income than is allowed for claiming the Senior freeze. Any suggestions to prevent the Box 5 amount from being carried over. Thanks.

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