In Step-by-Step, when you get to the screen titled "Here's the dividend info we have so far", find the "Broker or Payer" that paid the dividend that included the "Potential state tax exclusions ...", click on [Edit], which opens the screen "Let's get the details from your 1099-DIV ...", {{you'll have already given TurboTax the 1099-DIV figures or have already downloaded those figures from Edward Jones}}, click [Continue], which opens the screen "Did _____ provide their FEIN?", answer, then click [Continue], which opens the screen "Tell us if any of these uncommon situations apply to you". IMPORTANT, HERE IT IS! >> Check the box in front of "A portion of these dividends is U.S. Government interest.", then click [Continue], which opens the screen "Enter U.S. Government Interest." This is where you enter the total of your "Potential state tax exclusions ...". On the tax information packet I received from Edward Jones, this total was titled "Total Income from exempt governental obligations owned by you indirectly." (Evidently "U.S. Government Interest" is the same as "governental obligations". I guess the government has the "obligation" to pay you "interest".) Please note that the numbers involved in "Potential state tax exclusions ..." are not in any of the official forms (1099-INT, 1099-DIV, 1099-OID, 1099-B, etc.), but were at the end of the package from Edward Jones under "ADDITIONAL TAX INFORMATION". All of my exclusions were from mutual funds.
So that's it. In my case, the amount of the "Potential state tax exclusion ..." carried directily to my state tax program, resulting in a lower taxable income, yet had no impact on my federal taxes, as it shouldn't.
Final note: The above can also be accessed from the TurbeTax top menu: Tools>Topic List, then under 2. Federal Taxes, select "Dividend Income - Add, Edit, Delete" under "Dividend Income (Form 1099-DIV)".
