I redeemed EE bonds in 2016, and reported the interest on my 2016 Federal return.Looks like that income also flowed to my NYS return. Isn't that wrong? How do I avoid?

Forum|Forum|7 years ago
June 5, 2019
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Best answer by SweetieJean

When you entered the 1099-INT in Federal taxes, Wages and Income; there was a question box where you were supposed to check that the interest was not taxable for State purposes. You may have to now amend 2016 NYS.

SweetieJean

Answer

Alumni - Champ

SteamTrain

Level 15

Though  #1...ee bond interest should be reported in box 3 of the 1099-INT...and then it should be automatically excluded in the state tax return....if the software is working right.

Though...#2... many states use the full Federal AGI (including box 3 $$) as the starting point, and then subtract the box 3 $$ on a later line....so some people miss that and are mistaken about it not being excluded in the state return.  (Not sure what NY does)

Though #3.... this assumes that the user did not create their own 1099-INT and put it in box 1.
Those using Treasury-Direct accounts don't get a 1099-INT in the mail...they have to download it from their online Treas-Direct account.  Those who redeem paper EE-Bonds at the bank do get a paper 1099-INT (I think).

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*