topic Virginia Subtraction for Accrued Interest on Treasury Note in Get your taxes done using TurboTax

Virginia Subtraction for Accrued Interest on Treasury Note

chrisg0621 — Wed, 11 Feb 2026 04:05:19 GMT

Hello. I have Accrued Market Discount Interest on Treasury Notes held for over a year. This is treated as taxable Interest for Federal tax purposes. Virginia allows a Subtraction from AGI for government interest and dividends however TurboTax is not carrying the interest over to the Virginia Form 760 as a subtraction. Help appreciated.

ChrisG0621

Re: Virginia Subtraction for Accrued Interest on Treasury Note

VolvoGirl — Thu, 08 Feb 2024 16:46:36 GMT

Did you enter it in box 3 on the 1099INT? Not box 1. You have to click the little box for my form has more boxes to get to box 3.

Re: Virginia Subtraction for Accrued Interest on Treasury Note

chrisg0621 — Thu, 08 Feb 2024 16:56:25 GMT

Thank you VolvoGirl. The accrued interest is reported on a 1099-B and therefore is entered in the Stock, Mutual Fund, Bond section of TurboTax, with the interest entered as an "adjustment". The gain is not shown as a long-term capital gain but instead is posted as ordinary interest on the 1040. Thanks for your help. Chris

Re: Virginia Subtraction for Accrued Interest on Treasury Note

chrisg0621 — Sun, 11 Feb 2024 00:18:32 GMT

As follow-up on my original question, I received an answer from TurboTax Support. On the first page that loads in the State Return, titled "Here's the income that Virginia handles differently" there is a line item called "Other Subtractions from Federal Income" where the accrued interest can be entered. Problem solved, and this issue is closed.