NJ 1065 For Tiered Partnership

[Night Owl]

I am working on a 2023 Form NJ 1065 for a tiered partnership and am getting a strange result.  In 2022, the starting point for the NJ 1065 for a tiered partnership was to fill out Schedule A, report the federal figures in column A, then eliminate any amounts from tiered partnerships in Column B and enter the difference in Column C, which represented income earned directly from the partnership.  Column C then became the starting point for lines 1-11 of the NJ 1065.  The NJ K1 amounts from tiered partnership was then added to this figure and this is the income which was reported to partners on their NJ K1s in column A.  This makes sense since partners are only taxed on tiered partnership amounts that have been adjusted for NJ law (such as decoupling from bonus depreciation, etc.)

In 2023, the instructions changed (which LaCerte is following) and indicate that the 1065 lines 1-11 should pull from Column A of Schedule A.  This amount represents the federal 1065 schedule K figures and includes all income from tiered partnerships.  This makes no sense to me since ultimately, this is the income figure that is reported in Column A of the NJ K1.  I am only filing the NJ 1065 because the partnership has NJ resident partners but it has no NJ source income.  The NJ K-1s the partnership received are lower than the federal K1 figures due to depreciation being higher for NJ than for federal.  However, now in Column A of the NJ K1, the full federal figures are being reported instead of the NJ K1 amount passed through by tiered partnership.  This seems wrong and unfair.  The NJ resident partners will now be reporting income from partnerships on their NJ 1040s which do not reflect the NJ K1s received from the underlying partnerships in the tier.  

I'm not sure if I am explaining this clearly, but has anyone else experienced this?  Am I misunderstanding the new instructions for tiered partnerships for 2023?  The NJ K1s received by the partnership from underlying partnerships seem irrelevant with these new instructions as the NJ K1 amounts are subtracted and added back on the NJ 1065 on lines 18 and 21, which basically results in federal figures being reported by the NJ resident partners on their 1040s which does not seem correct.