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How do I calculate the US Government interest for 1099-DIV?

ccam — Mon, 03 Jun 2019 19:23:21 GMT

My 1099-DIV has an entry in Box 10. Is that the "amount of dividends that represents interest from US Government obligations"? I have selected the first entry in the "uncommon situations" dialog when manually entering 1099 information for a brokerage company. I've already entered the Box 10 and Box 11 information for the form.

It seems like you understand the Form 1099-DIV data entry...

GeoffreyG — Mon, 03 Jun 2019 19:23:22 GMT

It seems like you understand the Form 1099-DIV data entry process pretty well already. Boxes 10 and 11 are for municipal (tax-exempt) bonds, and private activity bonds (a sub-set of municipal bonds).

After your main entry screen in TurboTax, however, you are given the opportunity to enter certain additional information, such as US government interest. (Please see the screen-capture image below; simply click to open.) Typically, such federal government interest would come from holding a mutual fund or ETF that invests some (or all) of its assets in US government securities, and then pays you "dividends" as an investor in that fund.

This bring us back to your original question, and the way that you would have to determine that number. Basically, you have to look to your brokerage firm's 1099-DIV statement, which may have a breakout of some kind, for US government interest, and that will be the (percentage) figure you would use to figure out the amount of your dividends that were, in fact, federal interest.

If your brokerage firm hasn't done the legwork for you, then you'd need to do it yourself. Essentially this will involve looking at the website for fund company that sponsors each of your investments (Vanguard, Fidelity, Pimco, etc.), and then accessing their taxpayer information webpage(s). Typically, they will have a federal interest breakdown shown there, by fund.

If you have further questions, encounter any difficulties, or just want to speak with a live tax expert who can walk you through your TurboTax entries (including the ability to screen-share with your computer), please feel free to contact us. We would be happy to help you (and as a Premier customer, the call is free to you). Here is a link where you can create a support ticket and reach us:

https://support.turbotax.intuit.com/contact/

Thank you for asking this question.

Thanks so much for a nice detailed answer. This helps me...

ccam — Mon, 03 Jun 2019 19:23:23 GMT

Thanks so much for a nice detailed answer. This helps me a lot. My tax information statement does indeed have a breakdown, so I believe I can calculate the necessary values from that. It's good to know I have the TT help center as a fallback though!

You're very welcome, ccam. Yes, some brokerages do a muc...

GeoffreyG — Mon, 03 Jun 2019 19:23:24 GMT

You're very welcome, ccam. Yes, some brokerages do a much better job than others in reporting this type of (breakdown) information to their customers. It's a classic example of you get what you pay for. Since it's not a requirement under law, some financial institutions take the trouble to help and put in the extra work, and others do not. It sounds like you've got one of the "good" ones, in terms of financial institutions, and that's great to hear. But, if anything is missing from your statements, or if you have any other questions, we're here to help. Good luck with your future investing activities.

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emaven — Mon, 03 Jun 2019 19:23:25 GMT

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emaven — Mon, 03 Jun 2019 19:23:27 GMT

Hello -- I have a follow-up question about this. Let's u...

sam-ehrlichman — Mon, 03 Jun 2019 19:23:28 GMT

Hello -- I have a follow-up question about this. Let's use an example. Suppose my 1099-DIV has ordinary dividends (box 1a) of $100 and exempt dividends (box 10) of $1,000. Suppose also that the mutual fund company reports 50% of income from US government obligations. Then should I answer "Enter US Government Interest" with $50, $500, or $550 ?

Hello -- I have a follow-up question about this. Let's u...

sam-ehrlichman — Mon, 03 Jun 2019 19:23:29 GMT

Re: Hello -- I have a follow-up question about this. Let's u...

brettsky — Thu, 20 Feb 2020 17:10:40 GMT

Is there a follow-up to this question? I have the same question. Thank you. Some examples to follow would be great.

Re: Hello -- I have a follow-up question about this. Let's u...

BarbaraW22 — Sun, 23 Feb 2020 02:33:53 GMT

The 2019 Form 1099-DIV reports Noncash liquidation distributions in Box 10 and Exempt interest in Box 11. The question and examples provided by sam-ehrlichman in the above message state that tax exempt interest is in box 10.

In addition, the amount listed as "Exempt interest" in Box 11 of Form 1099-DIV would not be from U.S. Government obligations. Interest from U.S. government obligations are fully taxable on the federal return. The amount reported in Box 11 is not subject to federal income tax and is generally interest from municipal bonds. This amount would be reported in Box 2a of Form 1040. The amount in Box 11 may be subject to state income tax; however, depending on the state.

The amount reported in Box 10 of Form 1099-DIV as Noncash liquidation distributions is generally a nontaxable return of capital. This amount is not reported on your tax return. Instead you adjust the basis of your stock by the amount reported.

If a percentage of your dividend reported on Form 1099-DIV is from US Government obligations, you would calculate the percentage of the amount reported to you in Box 1a and include this in the section "U.S. Government interest" in TurboTax.

In the example above where ordinary dividends of $100 were reported in Box 1a and 50% of this was from U.S. Government obligations, the amount you would report in TurboTax for U.S. Government interest would be $50.

@brettsky

Re: Hello -- I have a follow-up question about this. Let's u...

psdeckers — Sat, 07 Mar 2020 17:14:52 GMT

In addition to that reported in box 1a, does the "US Government Interest" also include a percentage of US Government income from capital gains distribution reported in box 2a?

Re: Hello -- I have a follow-up question about this. Let's u...

JulieS — Tue, 10 Mar 2020 23:17:10 GMT

No, Capital Gains Distributions are not US Government interest because there are gains and not interest.

Re: Hello -- I have a follow-up question about this. Let's u...

yeadubs — Sat, 11 Apr 2020 17:57:20 GMT

That explanation was great. I just want to verify I understand with an example.

If I received a $100 of non qualified dividend income from ISHARES SHORT TREASURY BOND ETF, which according to the supplemental information holds 91.12% in US Treasury, the US Government Interest would be $91.12?

Re: Hello -- I have a follow-up question about this. Let's u...

chris_or — Fri, 10 Jul 2020 02:23:40 GMT

I have the same question as @yeadubs above.

and a related Q: I have a supplemental dividend report from etrade, but I see no mention of "US government interest". Is there an easy way to determine if I have NO US government interest by reading my 1099-DIV? Will any of the fields on the 1099-DIV statement tell me if I have no US government interest? For example, if box 10 is zero/blank for me, does that mean I have no US government interest?

Re: Hello -- I have a follow-up question about this. Let's u...

patmorsecpa — Fri, 19 Feb 2021 03:00:47 GMT

Try using the MPFCO.COM program. It's cheap and it works for all mutual funds to determine the US Government portion of interest and dividend income from the funds.

Re: Hello -- I have a follow-up question about this. Let's u...

emaven — Fri, 19 Feb 2021 07:15:13 GMT

That site is in a language I can’t read or understand.

Re: Hello -- I have a follow-up question about this. Let's u...

steve2488 — Mon, 22 Mar 2021 02:56:42 GMT

(CORRECT) search "pfmco.com program" gets the correct site. https://www.mfpco.com/

(INCORRECT) entering just "mfpco.com", I got a site in Chinese characters about starting a new business in, probably, China.

Re: Hello -- I have a follow-up question about this. Let's u...

steve2488 — Mon, 22 Mar 2021 03:08:27 GMT

TurboTax pogrom on 1099-DIV has a step "tell us if any of these UNCOMMON situations apply to you. (it is actually in lower case" uncommon").

I have to say that TT has been a little misleading, because it looks very "common" that "a portion of the dividends is U.S. Government".

Hence for over a decade, I just assume I had none (because TT says it is uncommon!). I have Fidelity FDRXX for over 20 years, and I knew there is a PDF file showing the percentage (FDRXX is 50% or more), but I never apply it till now. For 2020, I entered the number, and plan to file amendment for the past few years, because I had FDRXX dividend in the thousands.

Re: Hello -- I have a follow-up question about this. Let's u...

CharleyBC — Thu, 03 Feb 2022 18:54:26 GMT

Yes, I guess I've made the same mistake in the past, since TT says it's an uncommon situation. Sigh. This year I looked at my Vanguard 1099-DIV more closely, and indeed most of our ETFs have some portion of US Government interest. TT imported from Vanguard nicely, but I must say I'm disappointed it can't do the calculations automatically from the imported data. Or at least offer a worksheet to hold my hand through entering the amount and percent for each fund, and accumulate the total. Sigh again. Easy math, but tedious.

Re: How do I calculate the US Government interest for state reporting purposes on savings account?

ron6612 — Thu, 24 Mar 2022 21:43:20 GMT

I have Marcus savings account from Goldman Sachs and they won't provide any information on what percentage of the interest income is from US obligations. I'm pretty sure that they invest in govt obligations but can't get information from them or online. The percentage from US obligations is not taxable to Maryland. Any help on this would be appreciated!