Go to the state selection list of the first choice , and go to the very bottom of the list of states and select "More than one state". (yeah, that isn't "one" state...poor text choice by the programmers)
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The checkbox by " I earned exempt-interest dividends in more than one state" is only used if you can break out just the interest that came from your own state's bonds....and you also live in an income-taxing state
(but not CA, or MN, or IL....CA and MN have special rules, IL doesn't allow a breakout at all, and you must select "More than one state" for all of box 11)
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Example: If box 11 of the 1099-DIV is $1000, came from just ONE Mutual fund, and vanguard's documents (they publish elsewhere) indicates that 2% came from my own state's bonds. then I could break out that $20 from the rest of the Interest, and save myself 1 in my state taxes (5% of $20). IF multiple funds contributed to box 11 of the -DIV, it get messy, and you have to calculate the amount for each one..
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
