Get your taxes done using TurboTax

It depends. If you have an amount in Box 11, Form 1099-OID for Tax-exempt OID then you can use the following steps to exclude the earnings percentage of Alabama holdings.

1. Open your TurboTax return
   1. TurboTax Online: Search (upper right) > type 1099oid > Click the 'See more' in the FAQ below and click 'Go to 1099-OID
   2. TurboTax Desktop: Search (upper right) > type 1099oid > Click the Jump to ... Link
2. Select Form 1099-OID for original issue discount income > Continue > Edit or Add another payer > fill out your form > Continue
3. Select I earned tax exempt OID in more than one state > Select Alabama under State Name then enter the Alabama percentage amount
4. Scroll to the bottom to select Multiple States in the second line > Enter the balance of the tax exempt OID > Continue

Once  you complete this section the tax free amount for Alabama will be eliminated from taxable income in your state return.