When you enter your 1099-DIV on the federal side, you will show your federally tax exempt-interest dividends in box 12. Continue two screens and you will see the screen, Tell us more about your exempt-interest dividends. If you earned the dividends in more than one state, check that box, and enter how much came from MN bonds and how much came from elsewhere.
Then when you prepare your Minnesota return, under Tell Us About Any Income Adjustments, you will see Investment Income Adjustments, and you'll be able to enter the portion of the amount that transferred where less than 95% of the dividends came from MN bonds.
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