Why wouldn't it be taxable?

A NJ resident pays NJ tax on all of their income.

Caveat- NJ may have a pension exclusion/subtraction.

Did you try using the web? Google:

nj pension tax exemption

Discover results:

https://www.state.nj.us/treasury/taxation/njit7.shtml

It's better than expecting someone on a software internet forum to know every possible rule and exception for every State's retirement and combination of that with the residency State.

Use your resources, and look for info that will keep your work moving.

taxable unless they were teachers in the armed forces and a military exemption applies... either way there's up to a 100K exemption as @sjrcpa & @qbteachmt  indicated.