Question

New Jersey Tax on Backdoor Roth IRA

Forum|Forum|2 years ago
March 12, 2024
1 reply
0 views

I am inputting information for a Back Door Roth IRA into TurboTax, and it's processed correctly without any federal tax implications. However, for New Jersey, it seems to be classifying it as taxable under 'Pensions, Annuities, and IRA Withdrawals' (Column H) with a taxable amount of $7,500. The 'Date of Distribution' shows $7,500 (Column D), with 'Contributions Previously Taxed' listed as $0 (Column E), and 'Earnings and Contributions Not Previously Taxed' marked as $7,500 (Column F). I believe that this amount of $7,500 should not be taxable on either the federal or state level. How can I resolve this?

D

DanaB27

You will have to enter the $7,500 as “Contributions Related to this distribution previously Taxed by New Jersey” on the “Roth Conversion” screen during the state interview. In the state interview click "Update" next to "Adjustments" and continue through the questions until you get to the "Roth Conversion" screen.