You are correct, interest income on municipal bonds are not taxable to the IRS, and not taxable to the state as long as the bond is from your home state.
To enter your non-taxable interest income from municipal bonds please follow these steps:
- Click on Federal > Wages & Income.
- Scroll down to the Interest and Dividends section and click on the Start/Revisit box next to Interest on 1099-INT.
- Answer Yes to Did you receive any interest income?
- On the next screen, click on I'll type it in myself.
- On the next screen, Let's get your 1099-INT or brokerage statement details, mark the box My form has info in more than just box 1 (this is uncommon).
- Enter tax-exempt interest in Box 8.
@raynicki
