Most likely, the U.S. government interest has been entered in the wrong field in the federal portion of TurboTax.
To trigger the Colorado subtraction, it should be entered in Box 3 in the Form 1099-INT section in TurboTax. The amount is often mistakenly entered in Box 1, which won't generate the subtraction.
To verify this in TurboTax Online:
- Select Tax Home in the left pane
- On the Hi, let's keep working on your taxes! screen, select the dropdown to the right of Income & Expenses
- Select Start, Pick up where you left off, Review/Edit or Work on other income, as appropriate
- Scroll down and select Edit/Add to the right of Investments and Savings (1099-B, 1099-INT, 1099-DIV, 1099-K, Crypto)
- Select the dropdown to the right of the relevant Interest (1099-INT) entry
- Select Edit
- On the Now, let's review your 1099-INT screen, make sure you have your amount entered in the Box 3 - Interest on U.S. Savings Bonds and Treas. obligations field. Delete any unnecessary entries on the screen, then select Continue
- Continue through the following screens
