NC tax on 401K when in NJ?

Question

NJ does not reduce taxable income when employer money is placed into a 401K etc. Essentially the money is post tax. They do not tax the money coming out. I moved to NC and they tax the money as if it were contributed pretax. Essentially it is double taxed. I filed it as excludable income and they rejected my approach. Help!

Answer 1

Sorry, but taxation of your 401k distribution at the state level depends on the state you live in when you take the distribution.  The same is true for contributions.

In your case, you paid state taxes twice on your contributions.  There is no provision to get a credit for prior taxes paid.