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New Member
posted Mar 3, 2021 9:44:34 AM

Where is non-taxable interest? Turbotax says some was reported on federal form. State of Illinois may not allow it, depending on what it is.

My financial statement shows NO interest income, only dividend income.

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1 Replies
Level 15
Mar 3, 2021 10:27:11 AM

For Illinois residents,

 

1)  If you have tax-exempt interest reported in box 11 of a 1099-DIV form, those are from Mutual funds or other investment company collections of bonds, and you are not allowed to break out the $$ that came from Illinois bonds...so you must mark the source of all of those  box 11 $$ as coming from "Multiple States"  (that selection is at the very end of the state's list.  Desktop users will see the term "More Than One State" instead).

 

(Residents of other states should note that #1 is specific to Illinois.  CA and MN also have severe restrictions on when it is allowed a 1099-DIV, but most other states do not......but sometimes the state laws change)

 

2) If you have tax-exempt interest reported in box 8 of a 1099-INT form, you are  allowed to break out the $$ that came from Illinois bonds...but you are not required to do that .     IF you decide to do so, you find the $$ amount that was issued from Illinois Muni bonds you own,  (and any US territories like Puerto Rico) and when the software asks what state(s) the $$ came form, you indicate it as follows:

 

(Example is for an NC resident, and again note...the desktop software uses the term "More Than One State" and the Online software uses the term "Multiple States" ))

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