topic I bond State of Illinois Deduction in State tax filing

I bond State of Illinois Deduction

srgilbert123 — Wed, 21 Feb 2024 17:35:15 GMT

I spoke with the Illinois Dept of Revenue and they confirmed I bond interest is free of state tax. Unfortunately TT will not allow me to make that adjustment on the State Form. I have been on the TT help line for over 2 hours and no closure by the TT experts. Can someone assist? There is a line on the State of Illinois form to handle government bond interest but it is not possible to enter a value.

Thanks!

Re: I bond State of Illinois Deduction

JulieS — Wed, 21 Feb 2024 17:59:45 GMT

We'd love to help you complete your tax return, but need more information. Can you please clarify your question?

I have tested this and had absolutely no problem with it.

The adjustment appears on line 22 of Schedule M and is subtracted from the federal income before calculating the state tax. I didn't even need to look for the subtraction, TurboTax brought it up on its own.

Is your interest reported in box 3 of Form 1099-INT? If it isn't that could be the problem.

Re: I bond State of Illinois Deduction

Hal_Al — Wed, 21 Feb 2024 18:45:35 GMT

U. S. Treasury interest must be entered in box 3 at the 1099-INT screen. When it is entered there, TT will automatically make the deduction on the state return. There is no other way to make the adjustment.

Be sure that the US Treasury Interest in entered in box 3, at the 1099-INT screen. When you first see that screen, check the box "my 1099-Int has more than just a box 1", to get access to box 3.

Re: I bond State of Illinois Deduction

Mike9241 — Wed, 21 Feb 2024 20:28:53 GMT

The exemption for federal interest means that I bond interest should be entered in box 3 (only - don-t duplicate by entering in box 1) of the 1099-INT. That should carry into the state return as a deduction.