I want to add the following constructive criticism and request to Turbotax:
This issue involves a major oversight and omission in Turbotax, one which TT has ignored now for years. Federal agency bond interest is a major category of fixed income investment. There are three federal agencies whose individual bonds are tax-exempt on the state level.
In my original post, I included a chart showing which federal agencies these are: Federal Home Loan Bank, Federal Farm Credit, and TVA. Bonds issued by these three federal agencies (these are not "local government bonds") are purchased and held by many thousands of people. There should be a way in TT of excluding from one's state tax liability , in accordance with tax law, interest that is received from these bonds.
But there is no way to do this in TT without resorting to an override, as far as I have been able to find out in researching this year after year. People who live, for example, in Oregon, as I do, and who own any of the above three federal agency bonds are forced to override TT in order to insert in my state's return under Subtractions (code 315) the amount that should be excluded from state taxation -- that is, the bond interest received from these federal agency bonds. And once you use an override, you cannot then eFile.
Turbotax, please correct this major oversight. It has gone on long enough.
