You receive a 1099-INT from that broker for all interest received.
The total received for all your tax-exempt bonds will be in box 8 of that 1099-INT form (and maybe some box 13 $$ too).
Now....if that 1099-INT also contains any box 1 or box 3 $$ (it probably does)...what you need to do is remove the box 8 &13 $$ form the original 1099-INT and put those $$ in their own new 1099-INT form.
When you fill in the new 1099-INT with the box 8 (&13) $$ value, you will continue to the next page and you check the box "I need to adjust the taxable amount"...…………(yeah...it's not taxable but it needs adjustment)………..Continue to next page and choose "More than one state" (exception follows below) Continue to the next page and you will enter your $300 of accrued interest and select the accrued interest bullet below the box.
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Exception: Same as above...but if...IF..you are breaking down your box 8 $$ to indicate what $$ came from your own state's bonds...then you will need to create two new 1099-INT forms. One that contains only the box 8 (&13) $$ from your own state's bonds...and another 1099-INT from all other states (More than one state). Then the accrued interest will be put into whichever form had the accrued interest bond as a part of it.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
