This is really confusing because the TVA or other agency INTEREST I am trying to exclude from my IL return is reported on the 1099-INT form, NOT 1099-DIV form. If I try to specify special state treatment after entering the 1099-INT, TurboTax only allows special treatment for Maine, Maryland, Mass, New Hampshire, New Jersey, Tennessee and West Virginia.
IL Publication 101 (Rev. 3/10) states, "The income from notes, bonds, debentures, and
other similar obligations issued by the following is exempt
from Illinois Income Tax: ...Tennessee Valley Authority."
Wouldn't excluding 1099-DIV amounts create an inconsistency or is it OK since it doesn't affect your Federal taxes and the right amount flows through to IL Schedule M, line 21? What if your actual DIV income is zero or less than the interest you are trying to exclude, will this workaround still work?
