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Trad IRA distributions with Government Bond Interest 1099-R

What if the Government Bond Interest came from a (taxable) Traditional IRA distribution?  The interview question about Government Bond Interest does not come up on 1099R entries, only 1099 DIV? I have mutual funds in my IRA that produce this benefit...love to get that info to my State return for the deduction.

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2 Best answer

Accepted Solutions
dmertz
Level 15

Trad IRA distributions with Government Bond Interest 1099-R

https://www.state.nj.us/treasury/taxation/pdf/pubs/tgi-ee/git2.pdf

 

I suspect that one would need to track their interest received by their IRAs from direct federal obligations along with their NJ basis in traditional IRA contributions that they are already required to track.

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Trad IRA distributions with Government Bond Interest 1099-R

Thanks for the specific example from NJ. Since there is no interview question on this situation, I suppose I enter this on the "Forms" (and not the "easy step interview") page.  My state (ME) does have this line on the tax form. Furthermore, in my case it is easy to track as the only distributions I take from the IRA are dividends and interest.  From the prospectus I know what percentage is from US obligations.  

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4 Replies

Trad IRA distributions with Government Bond Interest 1099-R

As a discussion point,

 

I seem to recall that last year, one state started to allow a state deduction for the "portion" of the distribution that represented US bond interest...but most states have no such deduction from state income and will tax the whole distribution.  (For a 1099-R from an IRA)

 

I don't recall which state that was (somewhere in the Northeast US )…..but as a practical point, unless the entire IRA holding is distributed, it would be nearly impossible to track the sub-portion of a distribution that is from US bond interest...and even if you could, you would likely have to keep your own meticulous detailed records in such a way that would drive you nuts and lead to eternal regrets that you ever started doing so.

 

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

Trad IRA distributions with Government Bond Interest 1099-R

I guess if a particular IRA account contained solely US bonds or US bond funds, it would be easier to track.....but it still would depend on whether your particular state allows that deduction at all.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
dmertz
Level 15

Trad IRA distributions with Government Bond Interest 1099-R

https://www.state.nj.us/treasury/taxation/pdf/pubs/tgi-ee/git2.pdf

 

I suspect that one would need to track their interest received by their IRAs from direct federal obligations along with their NJ basis in traditional IRA contributions that they are already required to track.

Trad IRA distributions with Government Bond Interest 1099-R

Thanks for the specific example from NJ. Since there is no interview question on this situation, I suppose I enter this on the "Forms" (and not the "easy step interview") page.  My state (ME) does have this line on the tax form. Furthermore, in my case it is easy to track as the only distributions I take from the IRA are dividends and interest.  From the prospectus I know what percentage is from US obligations.  

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