Please follow these steps in TurboTax to include interest on a 1099-DIV that is tax exempt on your 1040, but taxable on your North Carolina return:
- Open your return.
- Search for 1099-DIV with the magnifying glass tool at the top of the page.
- Click on Jump to 1099-DIV at the top of the search results.
- Click Edit next to your 1099-DIV entered.
- Put a check mark in the box that says My form has info in other boxes.
- Enter your tax exempt interest in Box 11, Exempt-interest dividends.
- On the next screen, make sure the box for None of these situations applies to me is checked.
- On the next screen, enter the state.
- Click continue.
A mock-up return was created for this situation and it flowed correctly to North Carolina using the steps above. The amount entered that was tax-exempt on the federal side became an addition to North Carolina income.
[Edited 2/16/2021 | 4:56 pm PST]
@mfrank
@SteamTrain - Thank you pointing this out and I agree that it would be best if this was entered from the 1099-DIV screen.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
