Following up on this post as I think it contains some misinformation regarding the line tax exempt interest is reported on the 1099-DIV. It should be line 12, not line 11. Correct, @AmyC ?
Therefore, Michigan Schedule 1 Line 1 should be the addition of:
1099 Interest Line 8 minus Michigan portion of interest
1099 Dividend Line 12 minus Michigan portion of interest
K1 Tax Exempt Interest line 14 code A minus Michigan portion of interest
Less:
Adjustments such as bond premiums listed on Line 13 of 1099-INT
As mentioned by LITalum, if Turbotax is assuming a standard percentage bond premium instead of the actual percentage, a person could be overpaying taxes to Michigan. To correct this, you would have to falsify information input to the Federal questionnaire in order to get TurboTax to put the right number on Michigan's Schedule 1 Line 1 because TurboTax does NOT provide a worksheet for Michigan Schedule 1, or any other way to change the number. This is a programming error and should be corrected.
