If your payment includes after-tax contributions, it is not taxed.
Karin Price Mueller | NJMoneyHelp.com for NJ.com
Q. I have a 457 deferred compensation plan from the state of New Jersey, from which I withdrew money in 2021. I understand I don’t have to pay state taxes on my contributions. The plan administrator sent me a statement showing the state taxable amount of my 2021 withdrawal under the General Rule.
in a payment, they are not taxed, said Martin Hauptman, partner in the trusts and estates and taxation practice groups at Mandelbaum Barrett, P.C. in Roseland.of your total benefit, an allocable portion of your after-tax contributions is included in the payment, so you cannot take a payment of only after-tax contributions,” he said.
But directly to your question, he said the tax has to be paid currently based on the percentage that is taxable. If you’re not sure, work with a qualified tax preparer who can look more closely at the payments you’re receiving.