Unless the question is referring to tax-exempt $$ showing in box 12 of the 1099-DIV....then you select "Multiple states" from the very bottom of the dropdown list of states (or "More than one state" if using desktop software )
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For tax exempt $$ in box 12, in some cases, you can break out just the $$ that came from your own state's bonds to reduce your state taxation somewhat, but you need to do a bunch of calculations to do that...and the "Multiple States" selection is always acceptable.
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IF the box 12 $$ is the issue, and you do want to break out your own state's tax-exempt dividends, post back and we can give you more details....but unless the box 12 value is pretty large, many times it's not worth the effort....though that depends on which exact bond funds you owned.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
