NJ is a state that does not follow the Federal tax and requires state income tax on deferred compensation(not a government 457plan). But what to do when you get a payout, especially over 10 years, when the income was put in over a period of years. Is there a method to allocating how much of a payout in a given years has been taxed? The problem is only part of the income has been taxed by the state previously.
you can either pay it all upfront or pay it amortized throughtout the 10 years. it needs to be figured out which portion of your interest and principal have already been taxed. contact your tax professional to fill out the correct paperwork. good luck. |
