Thank you for laying out the numbers. So to summarize the formula used by TurboTax, the calculation for Michigan's Schedule 1 Line 1 is:
The addition of:
1. Total tax-exempt interest reported on Form 1099-INT, box 8 less the portion attributed to MI that is self-calculated and reported in the Federal forms. (make note of the percentage of the total attributed to MI to be later used in the adjustments)
2. Total exempt-interest dividends reported on Form 1099-DIV box 12 less the portion attributed to MI that is self-calculated and reported in the Federal forms. (make note of the percentage of the total attributed to MI to be later used in the adjustments)
3. Total tax-exempt OID reported on Form 1099-OID less any portion attributed to MI interest (make note of the percentage of the total attributed to MI to be later used in the adjustments)
4. Total tax-exempt interest income reported on K-1 Trust, box 14 code A less the portion attributed to MI that is self-calculated and reported in the Federal forms. (make note of the percentage of the total attributed to MI to be later used in the adjustments)
5. Then Subtract any adjustments such as bond premiums listed on Line 13 of 1099-INT using the percentages calculated above.
For example:
Total bond premium reported on Form 1099-INT, box 13: $xxx.00
Bond premium attributed to states other than MI: ($xxx.00 X %MI) = $xxx.00
Total 1+Total 2+Total 3+Total 4 minus Total 5= Michigan Schedule 1 Line 1
