Hi! I know your question was already answered, but I also just realized this...and that I've been overpaying my state taxes for at least the past four years! 🙄
Sorry for the lengthy answer but I'm hoping this will help others like us who missed this, as this is one of the few areas TurboTax maybe isn't quite so helpful.
Short answer: Yes, when you check that box, it will ask you to enter a value.
Yes unfortunately you will have to hand-calculate it.
Yes unfortunately in order to hand-calculate it you will have to look closely at your 1099-DIV, and will also need to find that percentage. If it's not already shown somewhere on the 1099-DIV, your broker may have a separate publication with a table of the %'s available.
For those who need to get back to that area in TT, go to "Federal Taxes" --> "Wages & Income" --> Interest and Dividends" --> "Dividends on 1099-DIV", and hit the button. It will take you to your 1099-DIV info (whether imported or hand-entered), and then hit "Edit".
Scroll to the bottom of the next screen and hit "Continue". Then the checkbox comes up. Click to select the checkbox and Continue.
That's when it will ask you to "Enter the amount of dividends reported on this 1099-DIV from [REDACTED] that represents interest from U.S. Government obligations."
Then get ready to calcumulate. 😂
Note that the % for each fund is different, so you'd have to hand-calculate the amount for each dividend-paying fund, and then add all of those amounts together. (Excel or Google Sheets might be helpful for this; I just used my phone's calculator.)
To make it easier on myself, I only calculated the amounts where I expected a significant value.
I determined (a bit ad-hoc) by looking for either big dollar amounts, or big percentages. (How big? Meh.)
Where neither of these were true, I simply disregarded them.
But yes depending on what securities paid ordinary dividends, how much they paid, and what the %'s are, it could be well worth doing these calculations and then entering the final value in this field.
Doing so saved me nearly $300 on my state taxes for 2024.
Now I'm kicking myself for not doing this the past several years; I am definitely going to try to amend my state returns back to tax year 2020.
