cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
New Member

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

 
1 Best answer

Accepted Solutions
Highlighted
Level 3

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

No, they are not.

This, from the MD 2017 State & Local Tax Forms & Instructions, Subtractions: 

ab. Income from U.S. Government obligations. Enter interest on U.S. Savings Bonds and other U.S. obligations. Capital gains from the sale or exchange of U.S. obligations should be included on this line. Dividends from mutual funds that invest in U.S. Government obligations also are exempt from state taxation. However, only that portion of the dividends attributable to interest or capital gain from U.S. Government obligations can be subtracted.

View solution in original post

11 Replies
Highlighted
Level 3

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

No, they are not.

This, from the MD 2017 State & Local Tax Forms & Instructions, Subtractions: 

ab. Income from U.S. Government obligations. Enter interest on U.S. Savings Bonds and other U.S. obligations. Capital gains from the sale or exchange of U.S. obligations should be included on this line. Dividends from mutual funds that invest in U.S. Government obligations also are exempt from state taxation. However, only that portion of the dividends attributable to interest or capital gain from U.S. Government obligations can be subtracted.

View solution in original post

Highlighted
New Member

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

I understand this but Turbo Tax only asks if any capital gains are from US obligations, not dividends.  This appears to be a mistake.  Please help me understand!
Highlighted
New Member

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

I understand this but Turbo Tax only asks if any capital gains are from US obligations, not dividends.  This appears to be a mistake.  Please help me understand!
Highlighted
New Member

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

does anyone know this answer to the comment above?  I would like to know/confirm this as well.
Level 3

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

see below for how to input those dividends.
Highlighted
New Member

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

thank you but my question is the same a krelged above.  Turbo Tax (in the MD state portion) is asking me if any capital gains from US obligations they are tax free and to enter an amount that should be tax free.  Is this capital gains only, ordinary dividends, or both?  I found a form on American Funds site that helps you calculate this (for their mutual funds) but it only talks about dividends (not capital gains) from US obligations are tax free ... which just confuses the issue for me even more.  Here is the worksheet calculator from American Funds: <a rel="nofollow" target="_blank" href="https://www.americanfunds.com/individual/service-and-support/tax-center/interactive-worksheets/ustre...> Any help is appreciated..  I waiting on a call back from MD tax office as well.  Thanks!!
Highlighted
Level 3

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

When you're in the Dividend section, after you enter them, you see the screen below.  On the next screen, you can enter the portion that's US Government obligations.

The next screen asks you the state that it's from.

Highlighted
Level 3

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

If you have MD capital gains that are tax free, enter them on this screen (see below):

Highlighted
Returning Member

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

Has anyone figured out how/where to get the US Obligations CAPITAL GAINS information.  US Obligation on DIVIDENDS is easy, but Capital gains I have not been able to find.  Thx

Highlighted
Employee Tax Expert

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

How are the Capital Gains reported? On what tax form? 

The Maryland State Return has a screen that reads "Here's the income that Maryland handles differently".

If you see "Partnership and S Corporations Adjustment" click there, answer Yes if this was reported on a K-1. 

Answer "Yes" if this was an "Estate and Trust Addition".

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Highlighted
New Member

Are capital gains on 1099-DIV from U.S. obligations subject to Maryland income tax?

We believe there is a bug in Turbo Tax software. The state of Maryland allows you to exempt a certain percentage of US general obligations interest from total ordinary dividends AND Total Capital Gains Distribution.  But if you your total ordinary dividend amount is smaller than your percentage amount of total exemption from US General Obligations for the particular fund, it flags this and says the total exempt amount can not be higher than the total ordinary dividends amount.  This has to be a bug in the turbo tax software because MD allows you to also exempt a percentage of long term capital gains distribution.  Can somebody help correct this?