New Jersey follows federal guidelines and timeframes for qualified rollovers. We will recognize a CRD as a tax-free rollover when the repayment of the CRD qualifies as a tax-free rollover for federal tax purposes. For federal details on Individual Retirement Arrangements (IRA), see Publication 590-B and Pensions and Annuities see Publication 575 .
The Division is flexible in reporting CRD distributions. You can report income over three years or in one year (the year of distribution). In either case, you must use State reporting calculations to determine the New Jersey taxable and excludable amounts, since most retirement plans include previously taxed contributions. See pages 12 – 14 of the NJ-1040 instructions or GIT-1&2 .
Keep Your Records
Keep records of your reporting history since you will need this information to calculate your retirement income on your return after you begin receiving regular distributions.
Distribution Recontributed and Repaid Timely
You can claim a refund for income taxes paid on a CRD distribution when it was repaid on a timely basis, and you are qualified to do so for federal purposes. File an amended return(s) to exclude the CRD income you originally reported. You should also include revised federal Form 8915-E.
A pension loan from a retirement plan is a loan that is not reportable as income.