topic Tax-Exempt DIV in State tax filing

Tax-Exempt DIV

ssweney1 — Sun, 12 Apr 2026 21:42:31 GMT

When asked if the DIV(s) were from one or multiple states I accidentally selected one and entered IL.
In looking at my 1099-DIV there were from multiple states. How do I correct?

Also the amount is listed in a % for a lot of different states. Do I just select multiple states?

Re: Tax-Exempt DIV

baldietax — Sun, 12 Apr 2026 22:45:02 GMT

go back and edit the 1099-DIV and you'll get the questions after the input boxes again to review

you don't need to enter all the states just your home state (also remember territories which tend to be state exempt e.g. Puerto Rico) and enter the rest as Multiple States

be sure to check the outcome on your state return

Re: Tax-Exempt DIV

ssweney1 — Sun, 12 Apr 2026 22:51:41 GMT

When you say go back and edit it are you saying I should do that in the forms view? Asking because I'm unable to figure out how using the step-by-step method.

Re: Tax-Exempt DIV

baldietax — Sun, 12 Apr 2026 23:10:49 GMT

are you using desktop? you can do it forms mode but Easy Step may be easier if doing it for the first time

in Easy Step go to Wages & Income / I'll Choose What I Work On / "Update" on the 1099-DIV section, this should bring up the list of investment income then scroll to that Payer / 1099-DIV click on the box and then click Edit. after you hit Continue after the 1099 boxes you'll get the additional questions and screen for muni info.

(the 1099 navigation can be a bit squirelly after all the workflow changes they've done)

One rub there is a bug where it can stuck thinking it's all IL exempt even after you enter all the state info, this is where Forms mode can be helpful to check, the very last line of Box 12 on the 1099-DIV worksheet has a line "state where the dividends were earned" which needs to have XX not IL otherwise it ignores the state breakdown, e.g. for VA below. But check your state return to see whether it is being reflected correctly or not.

all state exempt for VAneed "XX" on last line to use the table