JulieS
Expert Alumni

Get your taxes done using TurboTax

No, your box 12 amount is dividends from investments that are exempt from federal tax. 

 

In most cases, that would be mutual funds composed of municipal bond investments. Municipal bonds are issued by state and local governments, not the US government. 

 

This question is asking how much of your taxable dividend income is from US government interest. In some states, US government interest is not taxed on your state return. 

 

There is a separate question to determine if your box 12 dividends are taxed by your state. That is addressed on the screen, Tell us more about your exempt-interest dividends. 

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