KathrynG3
Expert Alumni

Get your taxes done using TurboTax

Possibly. In general, tax-exempt interest applicable to your state of residence will automatically transfer to the state section if you have indicated that the tax-exempt interest was from that state.

 

However, it is possible to have tax-exempt interest included in the return that are not from the resident state or that may have a special treatment in your state.

 

For example, Connecticut may require an addition to income in rare cases. Per TurboTax:

Your federal tax-exempt interest automatically transfers to your Connecticut return.

In rare situations, however, an addition to Connecticut income is required for any interest or dividend income on obligations or securities of any authority, commission, or instrumentality of the U.S. which federal law exempts from federal income tax but does not exempt from state income taxes.

 

Secondly, TurboTax will need you to enter any Connecticut Tax-Exempt Interest that was taxable on the federal return.

 

To identify the tax-exempt interest from Connecticut, answer the questions following the original entry in the Federal interview and any subsequent questions in the Connecticut interview.

 

For more details, see 2020 CT-1040-Online-Booklet, page 23.