The 2022 KS Schedule S instructions for box A1 state that you must deduct the expenses "directly incurred in purchasing these state or political subdivision obligations". The bond premium is an applicable expense. So, since half the amount in box 8 is attributable to KS, TurboTax is dividing the Box 13 premium fee in half and deducting that from the income. ($1,610.24/2 = $805.12, $1500 - $805.12 = $694.88 which is rounded to $695)
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