@ssmith42107
You may be confusing two separate things.
1) Tax-Exempt Interest or Tax-Exempt Dividends refers to interest that is exempt from taxation on the Federal tax return. These are not Federal obligations...these are interest or dividends paid out by bonds issued by States (cities, counties, townships, school districts), or the US Territories (Like Puerto Rico or Guam, etc).
2) For US Government obligations, the interest or dividends paid out from US Treasury Bonds, Notes, Bills, or US Savings Bonds...those $$ are not taxed by the states
___________________________
But the term "Tax-exempt Interest" or "Tax-Exempt Dividend" is used almost solely for case #1.
And in the software, when case #2 is being dealt with, they usually indicate they are referring to US Government Interest, or US Treasury Interest, or interest from Savings Bonds
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
