401K distribution- taxable to NJ

Forum|Forum|4 years ago
March 12, 2022
3 replies
24 views

My client lived in Texas her whole life, and worked in TX. She moved to NJ in August 2021, worked remotely for 2 months, then retired. She took a 401K distribution and had federal taxes taken out.

The 1099R shows same taxable amount for Federal and NJ. NO New Jersey tax was taken out.

I am not used to doing NJ returns, (I'm in Texas).

Is there any way to reduce the tax in NJ since she #1 is a part year resident, and #2, she contributed to this 401 while in Texas? Trying to reduce the tax on this.

Any help would be appreciated!!!

Lacerte Tax

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P

PKCPAMST

Level 6

Per the instructions for Form NJ-1040 Line 20a — Taxable Pension, Annuity, and IRA Distributions/Withdrawals:

Part -Year Residents. Include only the taxable amounts you received while you were a resident of New Jersey.

PK, CPA, MST

qbteachmt

Level 15

Did she stop working before Oct 1? Read this:

https://www.state.nj.us/treasury/taxation/covid19-payroll.shtml

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C

cowboys15Author

Level 3

She moved to NJ August 1.. She then worked for an additional 2 months.

Does this mean I can say that only 2 months of this amount is taxable to NJ? Even though the 1099R shows that all of it is taxable to NJ?

qbteachmt

Level 15

You stated: "then retired. She took a 401K distribution and had federal taxes taken out."

It seems this is the timing and sequence of events:

Worked in NJ for TX company = taxable wages for NJ from Oct 1.

Took retirement distribution, if taken after moving = fully reportable to NJ: "Include only the taxable amounts you received while you were a resident of New Jersey."

Read this: https://kulzerdipadova.com/news/new-jersey-extends-retirement-income-exclusion/

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