20 May How do I account for this IRA on my N.J. tax return?
Q. In 2019, I contributed to a non-deductible IRA and then immediately converted it to Roth IRA. The brokerage company issued a 1099-R indicating the full IRA disbursement as a premature withdrawal. On my New Jersey return, should I show the amount from the 1099-R on line 20a despite the fact that my 2019 contribution was non-deductible and there was no growth in the IRA?
— Still working
For federal and NJ purposes, the rollover is not taxable unless the amount rolled into the Roth exceeded the amount contributed, said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.
The brokerage company has no choice but to issue the 1099-R in that manner, Karu said.
“Do not enter it as a taxable transaction,” he said. “If I were preparing the New Jersey return, I would include it on both lines 20a and 20b.”
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This story was originally published on May 20, 2020.
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