TurboTax does not allow me to indicate that it is often the case that only a portion of exempt interest/dividend income (reported in Line 11, 1099-DIV) is applicable to a State return. I use TurboTax Premier 2020 to do both a Federal and State of MA return. I would greatly appreciate it if anybody knows of a fix. Following is the detail of my concern.
Investments in a Bond or Muni fund yields interest/dividend income. This income is reported on 1099-DIV. Some of that reported income is exempt from taxation at the Federal level. The total amount of such income that is exempt from taxation at the Federal level is reported on Line 11 of 1099-DIV.
Similarly, some of that reported income is exempt from taxation at the State level. But, the amount exempt at the State level is often different from the amount exempt at the Federal level. This is because individual Bond and Muni funds might produce interest/dividend income that is 100% exempt on a particular state tax return while others often produce interest/dividend income that is only partially, or not at all, exempt on a particular state tax return.
So, the reported exempt income on Line 11 of 1099-DIV is fine to use on a Federal return but NOT always on a state return.
My Premier version of TT reads the various 1099s pertinent to me and populates the various TT fields with the relevant amounts. For exempt income on my State return, TT uses the value reported on Line 11 of 1099-DIV. I could not find anyway to indicate that the entry on Line 11 of 1099-DIV is not appropriate for my State return.
The relevant Forms for my State return in Massachusetts are Form 1 and Schedule B. So far as I can tell the State of MA Schedule B takes information from the Federal Schedule B and I could not find a place on either to indicate that not all of the value from Line 11, 1099-DIV was appropriate for my state return. I know the correct amount of exempt interest applicable to my State return but can find no way to input it to TT’s calculations.
I would appreciate any input/help anybody has to offer.
Thanks,
Charlie
