Backdoor Roth and NJ-1040 line 20b (i.e. Worksheet C)
I did a classic backdoor Roth conversion. No Traditional IRA balance, made $6k after-tax nondeductible contribution to Traditional IRA, immediately converted to a Roth IRA, and no earnings. I’m good with the federal reporting and form 8606 etc.
I’m confused about NJ-1040 line 20b (calculated from Worksheet C line 8) the Excluded IRA distribution/withdrawals. Since it’s an after-tax contribution, the Taxable IRA distribution/withdrawals 1040 line 20a (Worksheet C line 7) = zero. That makes sense, but what about 20b?
Line 2 of Worksheet C says do not included tax-free rollovers. “Total distributions from IRA during the tax year. Do not include tax-free rollovers.” NJ doesn’t allow deductions while funding either Traditional or Roth IRA, so the conversion would seem to be a tax-free rollover. Therefore is Line 20b zero? or $6k? As best as I can either way, 20b doesn’t impact any calculations.
https://www.state.nj.us/treasury/taxation/pdf/pubs/tgi-ee/git2.pdf
Submitted by Patrick Szary on Wed, 2023-03-22 02:48