Thanks for response. Most of my muni income is federal exempt but NONE is state exempt. So when on the federal return I enter the exempt amount, that exempt amount gets automatically carried over to state return. My thought is on state form go the "other situations" option and then select additions. The form requires you to describe the addition and I would state Fed Exempt Dividend that is not State exempt and then enter the amount. I ran a dummy return and when I did that, it did adjust my state tax obligation appropriately by adding back in the federal exempt income. Would this be acceptable?
