tax exempt dividend 1099-div box 12 - using turbotax 2025

[holemanr1]

Turbo tax 2025, is charging federal tax on tax exempt dividends - WHY ?

[AmyC]

It isn't for me. 1099-DIV Box 12 is federally exempt income and I just created a 1099-DIV and put in $100 for box 1a and $85 for box 12. When I look at the Form in the program, it is correct. Next, I looked at Sch B and it correctly shows the federal box 1a. The smart worksheet showing the box 12 exemption with the state but it is not included in the federal income. My 1040 shows only the interest from box 1a.

I wonder if other income is pulling in to change your value or something was entered in the wrong spot. You should view  your forms, including all worksheets:
 

• In desktop, switch to Forms Mode. 
• For online:
  1. On the left side, select  Tax Tools
  2. Select Print center
  3. Select Print, save or preview this year's return
  4. If you have not paid, select pay now.

I will add screenshots of my correct forms so you can compare and look for issues.

The 1040 shows:

Sch B

The 1099-DIV

[holemanr1]

[holemanr1]

tax exempt on 1040 2a  shows 00

the manually entered 1099-div tax exempt amount is not carried forward

[RobertB4444]

Are you also entering the tax exempt income into the 1099-DIV form?  When you entered it into the 1099-DIV form where did it put the tax exempt income on the worksheet?  Because just overwriting it in forms mode does not necessarily solve your problem. 

[holemanr1]

only entered  when adding DIV-1099,  do not use forms mode.

Just answered use the step by step mode - checked the forms mode per your suggestion

Thanks for your continued support. 

[holemanr1]

Amyc, RobertB4444 - tax experts

my inquiry open for 5 hours and 3 hours since last update.

I will be signing off, will connect back on Monday 2 -23 -2026 - to find if explanation is available.

My return is very simple, I'm retired, just some 1099's DIV and INT forms, one of which is tax exempt which is not working and adds to federal income- state KY works okay.

Does TurboTax 2025 have a solution?

[AmyC]

Maybe you have a piece of data stuck. A full or corrupted cache can cause problems in TurboTax, sometimes you need to clear your cache (that is, remove these temporary files).

Online version:

1. Delete the form/ worksheet- if possible, see How to Delete  
2. Log out of your return and try one or more of the following:
   • Don't use Internet Explorer.
   • Clear cache and cookies,
   • Sign in using a different browser.
   • Sign in using a different device.
3. Log back into your return.
   • Enter the information again.

Desktop version: 

1. Delete the form 1099-DIV
2. Save your return while closing the program.
3. Update the program
4. Open
5. Enter the information again.

[holemanr1]

Using deskop version

Deleted 1099-DIV

closed program, reload program and reenter 1099-DIV with

box 12 exempt interest divident -

same result,  added to federal taxes due

is their another message board other users same problem?  I cannot be the only one with tax exempt 1099-DIV

[holemanr1]

enter using forms - same result

[AmyC]

You have me thinking differently now. The program is working. The first form, shows the dividends on line 12 - refund $1146. The next form shows a zero on line 12 exempt dividends and the refund is higher. This does not make sense at first look. Let's go deeper.

• Look at your 1099-DIV box 13, maybe some of it is not exempt due to AMT.
• Social security benefits change the taxable amount due to the increased income

In Forms mode look at the changes and compare:

1. check line 2a is correct exempt interest and not on line 2b
2. line 6b, taxable social security benefits - is that changing?
3. form 6251, AMT - alternative minimum tax, look at line 2g
4. form 1040, line 16 - if your taxable income did not go up, it could be a reduction in credit, like EIC or CTC, or it was AMT

[holemanr1]

Entered tax info online at Turbo Tax - better result

I will stop using desktop Turbo Tax 2025, as the tax exempt entry worked, using web on-line filing.

When you were giving me updates, which version turbo tax were you using; destop program or on-line filing?

Can understand why it worked for you. I did use google chrome as web brower.

[DianeW777]

It appears @AmyC was using TurboTax Desktop since she referenced 'Forms' mode. The option to view Forms is not available in TurboTax Online. TurboTax Online is easy to use and in many ways very versatile, thank you for the update.

You have access to all forms when you choose to print your return in TurboTax Online/Mobile.  However you are required to pay before printing, but do not have to file until you are ready.

• Can I print a copy of my return in TurboTax Online before filing?

If you are using TurboTax Desktop you can switch to Forms and review all forms and worksheets.

@holemanr1