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New Member
posted Jun 1, 2019 4:56:48 AM

I received interest income from the IRS which stated that it is taxable. How do I report this thru turbo tax?

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1 Best answer
Alumni
Jun 1, 2019 4:56:50 AM

You received a Form 1099 (with NO prefix or suffix), generally limited to interest paid *by* the IRS on delayed tax refunds; that interest is taxable by both the IRS and your state. (Though paid by the Federal government, it is NOT exempt from state taxation because it's not from a Treasury security, U.S. Savings Bond, or other government security.) Since it's essentially the same as a 1099-INT issued by private payers, enter it in TurboTax as a 1099-INT in the interest section.

2 Replies
Alumni
Jun 1, 2019 4:56:50 AM

You received a Form 1099 (with NO prefix or suffix), generally limited to interest paid *by* the IRS on delayed tax refunds; that interest is taxable by both the IRS and your state. (Though paid by the Federal government, it is NOT exempt from state taxation because it's not from a Treasury security, U.S. Savings Bond, or other government security.) Since it's essentially the same as a 1099-INT issued by private payers, enter it in TurboTax as a 1099-INT in the interest section.

New Member
Mar 1, 2020 6:27:04 AM

Turbotax calculated an increase in my federal tax for 2019 when I reported the interest income that I received from the IRS on an overpayment of federal tax from a previous year; however, this is in effect a refund of the interest previously charged to me when I was forced (due to an IRS error) to make the overpayment.  Shouldn't I be able to avoid paying tax on this interest, since I did not previously receive a tax credit for the interest expense I was (over)charged on the previous tax overpayment?  If so, how do I make the adjustment on my 2019 return?