IRA RMDs New Jersey with multiple IRAs
Hi there, I am going to be turning 72 next year and had a question about how my NJ state taxes will work for the RMDs from my IRA accounts. I have 2 IRAs: one from a 401(k) rollover that I made tax-deductible(Both Federal and State) contributions to and one from a 403(b) rollover which I made contributions to and did not get a State tax deduction. My question is, I know at a federal level I can aggregate my RMD requirements and take them from one IRA account. My question is: will I be able to avoid NJ State taxes on my RMDs if I pull the aggregate RMD requirement only from the 403(b) that where my contributions were previously taxed at the state level?
Permalink Submitted by Alan - IRA critic on Fri, 2022-10-07 02:43
No. While you can take your RMD from the two IRA accounts in any proportion, the taxable portion of the distribution on your state form will be calculated using a NJ tax worksheet that treats the two IRA accounts as a single combined account. The taxable amount will be pro rated as a portion of the total value in both IRA accounts. You only get taxed one time on each dollar in the IRA that has not been previously taxed.