Based on Vanguard’s document ‘Tax-exempt interest dividends by state for Vanguard municipal bond funds and Vanguard Tax-Managed Balanced Fund’, only 1.32% of the income is from investments in states exempt from NM taxes. In particular New Mexico (0.65%), Puerto Rico (0.52%) and Guam (0.15%).
Given the amount on line 11 of my 1099DIV, all of the NM-exempt amounts were well over a dollar.
The problem is Turbotax calculates the NM-exempt amount is equal to the ENTIRE federal tax-exempt amount. It puts the entire federal tax-exempt amount in line 6 of the NM PIT-ADJ form. This dramatically overstates the amount I can exempt from NM taxes. This results in a multi-hundred-dollar lower New Mexico income tax.
Perhaps I am misinterpreting something and someone can educate me.
BTW – Saw the same problem on 2019 NM income tax so I didn’t submit the Turbotax result.
