State tax filing

@jr72     OK, some seat-of-the-pants thinking, subject to, perhaps , someone's more knowledgeable comments/info.

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Yeah, sometimes certain Bond dividends are confusingly called interest too.  It's not actually "dividends from interest"

1) Dividends from stock holdings are always called dividends.

2)  The interest from bonds, (Company, State, Municipal, or US Govt ) are sometimes confusingly, or interchangeably called dividends too...when it's really just interest.    BUT   ..  The "dividends derived from interest" that Alabama refers to as being exempt from AL taxation?......they may actually be referring to $$ in box 1a of a 1099-DIV form.  IF you hold any mutual funds, they will note all the stock dividends + interest from US Govt bonds they held in box 1a of a 1099-DIV form...so that number in box 1a is mixed stock dividends plus US Govt Bond interest.    So they are telling you that the US Govt portion of box 1a on the 1099-DIV form is eligible to not be taxed by AL...and can be broken out to not be included in AL taxable income.

3)  the "Alabama municipal obligations which are received from a regulated investment company."     (as noted already by @ErnieS0  above)   will be on that 1099-DIV form in box 11, but will be mixed with $ from municipal bonds of all the other states that your Mutual fund may hold.  Box 11 $$ on the -DIV form are commonly referred to as "exempt interest-dividends", i.e. both designations....kind of a "whichever you want to call them"  term.

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then #4)

4)  Credit Unions refer to their interest issued as "dividends", probably because Credit Unions are considered customer owned.....but it is all reported on a standard 1099-INT form and never on a 1099-DIV ....so it's really "interest".

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yeah.  ARRRRGHHH !!