When input interest income from TreasuryDirect, Turbotax didn't list "California" for "Our state doesn't tax all of this interest"

[szhao098]

I'm trying to input the interest from TreasuryDirect. At the step "Tell us if any of these uncommon situations apply", I select "Our state doesn't tax all of this interest ".  But the state list doesn't have "California". Why? I thought no need to pay state tax for the interest income from TreasuryDirect. Is it right?

[ThomasM125]

Federal bond interest is exempt from taxation in California and all states. Some states tax other types of interest differently than how it is taxed on your federal return and the box you are referring to applies to those states. I believe the 1099-INT form you received has the tax exempt interest listed in box 3, so that is how TurboTax will know not to include it with your California income.

[Izzy67]

I'm in New Jersey and have a similar question. Does turbo tax have the option to auto upload the 1099 from treasury direct like other brokerages, or I need to manually input. Because the only info on the 1099-int is the interest accrued from iBonds. How will turbo tax know not to take of state tax? 

[DoninGA]

@Izzy67 Treasury/Direct is not a TurboTax import partner.  You will have to enter the interest from the bond manually.

[Izzy67]

Thank you for the reply. How will turbo tax understand that this interest is exempt from state tax?

[VolvoGirl]

@Izzy67   What box is the interest in?  It usually is in box 3.  That tells it to deduct it from state.

[Izzy67]

Got it! I was inputing the interest into box 1. Thank you for your help!

[surfcityjerry]

How to enter Treasury income into box 3 in interest income

[mesquitebean]

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@ surfcityjerry wrote:

How to enter Treasury income into box 3 in interest income

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When you go through the 1099-INT interview, on the screen where you enter the Payer name and interest it will initially only show 1 or 2 boxes.  On that same screen look for a checkbox or link that says "My 1099-INT has more boxes" (or similar wording.)    Then the page will expand and show all the boxes of a 1099-INT.