I have tax exempt municipal bonds and when I enter in the "exempt interest dividends" amount TT taxes the amount on my return. These bonds are in a tax free mutual fund

[tomorgan-mindspr]

TT is taxing the amount entered in block 11 on my federal income tax form

[ThomasM125]

I believe you are referring to box 11 on your form 1099-Int that reports interest income. Box 11 on that form is for Bond Premiums, not tax exempt interest income, that is reported in box 8. Maybe you entered the exempt interest income in the wrong box?

[SteamTrain]

But if box 11 on a 1099-DIV, then that is the correct place for a -DIV form.  (Most likely since Mutual Bond Funds have them in box 11 of a 1099-DIV)

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Tax refund went down after entering?  Yes, that can happen, especially if you are retired and on SS. 

Normally Tax-exempt income in box 11 of a 1099-DIV isn't taxed by the Feds.....BUT   any income entered in that area can make more of your SS taxable.  So  taxes may increase on your SS, until 85% of SS is taxed, then it stops with further tax-exempt income $$.

OF course, it could be some other deduction or credit that includes Tax-Exempt dividends/interest in the "MAGI" calculation, but I can't predict which (if any)