US Govt Treasury Bills are not taxed by states. Where do I enter this on the Turbotax form?

[SteamTrain]

The interest from them are reported in box 3 of a 1099-INT form.

Once entered properly in box 3, of that form in the Federal section, the same $$ will not be used in the state tax return...either not included in the first place, or (more commonly ) removed is some subtraction line in the state form.  How each state handles this depends on which state is involved.

[LLaurie]

I'm sorry but I still don't understand.  When you enter this Government Security under interest receipts on the Turbotax form where do you go to make sure that this interest is not tax (along with other non-Government interest receipts) by the state (in my case DC which does not tax Governt securities).

Thank you

[SteamTrain]

Every state (and DC) has their own way to handle them, on whatever lines they have on whatever forms they use...so i's all over the place.

...I don't know DC forms....maybe someone who knows DC will see this and suggest where they are on teh DC forms...or look yourself by going  to the DC tax department page, save  PDF copies of their 2019 tax forms and instructions, and search for the place they put them...usually a subtraction section.

[cbeis]

I am having the same issue.  US Govt interest is not being forwarded to the state return (ND in this case).  I entered the info but the ND return seems to be "ignoring" the info.

[KrisD15]

When you enter the 1099-int in the Federal section, the coding tells the program to subtract  it from the state return. 

For DC it is on Schedule 1 Calculation B line 1 and flows to the D-40 line 13

For North Dakota  It should show on line 6 of your ND return. It will not show in the taxable income amount in the TurboTax  program,

@LLaurie

[mikelonisjax]

I use TurboTax Hame and Business.  I have some securities on the federal return that have amounts of U.S. governmental interest.  A portion of that interest is not taxable in the State of Michigan.  What entries do I make on the federal and state returns so that the Michigan portion of the U.S. governmental interest is not taxed on my Michigan return?  Please help me. 

[KathrynG3]

TurboTax will cover it. To flag this as US Governmental Interest, follow these steps:

• From the Personal Tab, select Personal Income
• Select I'll choose what I work on
• Scroll down to Interest and Dividends>Interest on 1099-INT and select Start/Update
• Here's the interest we have so far
  • Either Add Interest income by clicking Add Interest income, or
  • Edit your existing entry by clicking Edit
• Let's get your 1099-INT or brokerage statement details
  • Enter who you received the interest from and the box 1 amount
  • Click the box by My form has info in more than just box 1 (this is uncommon) 
  • Fill in the rest of your form exactly as you received it and click Continue

This will automatically carry these details to your state return. To confirm this result, follow these steps:

• Click the Forms icon in the upper right corner to toggle to Forms
• Scroll down to Michigan Individual Schedule 1
• Schedule 1, Line 10, which is a subtraction, should be populated with the income form U.S. government bonds and other U.S. obligations included in full from Adjusted Gross Income captured on MI-1040, Line 10.

[TxQuery99]

Were you able to resolve where to enter this info? As it does not appear on my brokerage 1099 there is no box for entry.  (It is calculated from a document provided by my brokerage with % of US Government items by mutual fund.)

[TxQuery99]

This US Govt income does not appear in the 1099 from my brokerage.  Rather one calculates it from the document found on the brokerage website which provides the % of US Govt obligation interest by fund.  These amounts are a deduction for MI but not Federal.

Where does Turbotax get the input for line 10 of MI Schedule 1?

[SteamTrain]

The US govt interest to be deducted should be coming from the total of

1) box 3 $$ on  1099-INT forms

and

2) the US Govt interest you indicated as a sub-part of box 1a $$ on 1099-DIV forms.

_______________________

For #2, you EDIT the 1099-DIV form, and enter all the $$$ that are actually on your real 1099-DIV.

............THEN..you Continue to the next page and there is a checkbox to select:

 "A portion of these dividends is U.S. Government interest."

......THEN..you continue to the next page you get to enter what sub-part of box 1a  represents $$ received as US Govt Interest....and those $$ should then added in with #1 to go into line 10 of the MI schedule 1.

...BUT...you have to calculate the proper amounts yourself, since the value in box 1a and a 1099-DIV can be a mix of stock dividends, Mutual Fund short term gains, and other mixed Corporate/US Govt bond dividends.

_______________________

I suspect there may also be some US Govt $$ that can come in on a form K-1...but I have no experience with that particular form

[TxQuery99]

That worked.  Thank you.

[jlpMacKay]

Hi Kathryn,

On schedule ADJ/CG of the Virginia state tax return the amount in line 1 under additions, which is interest on obligations of other state, does not tie to the non-Virginia tax exempt interest amount that I entered in Box 8 of Form 1099-DIV.  I think the amount that is being added to my Virginia State income is too high based on my calculations.  However, TurboTax does not permit me to amend the amount on schedule ADJ/CG of the Virginia Form.  How is this add back to state income amount calculated by TurboTax?  Does TurboTax deduct a portion of the bond premium expense to calculate the amount to add back to Virginia State income?  

Thank you,

Judy 

[ReneeM7122]

No, TurboTax doesn't actually deduct a portion of the bond premium expense to calculate an amount to add back to Virginia State income.  To get the bond to show as nontaxable by the state, entering the tax exempt interest in Box 8 of the 1099-INT  will confirm the payer's EIN, which will carry over until you can enter the sate from which the municipal bond came.  The state has to be the sate you live in for it to be non-taxable.

[sharongmel]

Where do I enter the state ID for it to confirm it is not state taxable? I entered the 1099-INT box 3 and my state continues to show it as taxable.  I am in PA