Turbotax incorrectly include Roth IRA conversion into NJ taxable income
If you qualify to convert an existing IRA to a Roth IRA for federal tax purposes, you also qualify for New Jersey tax purposes, even if your New Jersey taxable income is more than the federal limitations.
You can withdraw all or part of the assets from a traditional IRA and reinvest them (within 60 days) in a Roth IRA. In most cases, your contributions to a traditional IRA were previously taxed. Only the earnings are taxable to New Jersey in the year you roll over the funds. However, any amounts you roll over from a traditional IRA to a Roth IRA that were not previously taxed by New Jersey - such as a rollover distribution to an IRA from an employer’s 401(k) plan must be included in your New Jersey income in the year the funds are withdrawn from the traditional IRA