Same problem as Hawaii involving the Accrued Market Discount from US Treasury Notes being reported as Interest Income on Line1 of the 1099-Int not line 3 (below). For federal purposes it is Taxable but for State purposes it should be backed out. However, I have an Illinois return and do not see on the Schedule M a catch-all Subtraction line i.e. Other Deductions. If I simple do a manual override to the amount from the 1099-Int Line3 to add the Accrued Market Discount to back it out there is no way to label it as Accrued Market Discount (which comes from the 1099-B). Is there a way to show the Accrued Market Discount amount as a Subtraction to provide an audit trail?
