Why is the amount of tax exempt interest income entered in line 8b on federal form 1040 added again on Arizona state tax line 13 by turbo tax? The amount on federal line 8b is part of the federal adjusted gross income that the state tax form 140 starts with on line 12.This adds the tax exempt interest twice to the state income total. This problem seems to come from the questions following the entry of 1099 div info. Big problem.