topic Virginia tax on US Saving Bonds in State tax filing

Virginia tax on US Saving Bonds

Booglw — Thu, 06 Feb 2020 19:46:47 GMT

Virginia exempts interest on US Savings Bonds Turbo Tax does not so how to take that exemption Is it under the subtractions to federal income?

Re: Virginia tax on US Saving Bonds

BillM223 — Thu, 06 Feb 2020 20:23:00 GMT

When you enter the 1099-INT into TurboTax on the federal return, there is a box that reads "Box 3 - Interest on U.S. Savings Bonds and Treas. obligations".

Any amount put in here is added to "Virginia Subtractions" on the VA return, so the interest on U.S. Savings Bonds is automatically removed from VA taxable income.

Re: Virginia tax on US Saving Bonds

hickory248 — Tue, 03 Mar 2020 15:48:00 GMT

After submitting my Virginia tax return, I noticed that you added the amount for US savings bonds (Additions) and also subtracted the SAME amount (Subtractions). Since the amount was added on the federal taxes previously, it should NOT have been added to the state form.

Re: Virginia tax on US Saving Bonds

BillM223 — Tue, 03 Mar 2020 18:46:24 GMT

In my test, US Savings Bonds interest appears only as a Subtraction on Schedule ADJ (line 4).

Can you tell me on what line this same interest appears on Schedule ADJ as an addition?

Re: Virginia tax on US Saving Bonds

hickory248 — Tue, 03 Mar 2020 19:36:42 GMT

Line 2b and there is a 10 after the 2b

Re: Virginia tax on US Saving Bonds

BillM223 — Tue, 03 Mar 2020 19:48:20 GMT

@hickory248

Is that 10 a dollar amount or is it referring to line 10 on the Other Additions Statement?

If it is appearing on line 10 of the Other Additions Statement, this suggests that you entered it both as US Savings Bonds interest (which is why it appeared as a subtraction) and as tax exempt interest on the federal return (the addition).

Did you check on of those boxes on the screen immediately after entering the 1099-INT? Where it says "Tell us if any of these uncommon situations apply?"

And did you enter the interest in only one box (box 3) on the 1099-INT screen itself?

Re: Virginia tax on US Saving Bonds

hickory248 — Tue, 03 Mar 2020 20:24:21 GMT

No uncommon situations boxes checked. Yes the only place the interest shows is on box 3 of the 1099-int.

I may have put the interest in the wrong place on the Virginia tax form, come to think of it.

Re: Virginia tax on US Saving Bonds

BillM223 — Tue, 03 Mar 2020 21:01:43 GMT

Hmmmn, I don;t think I put the US Savings Bond interest anywhere on my Virginia return. Let me know if that is it...

Re: Virginia tax on US Saving Bonds

hickory248 — Wed, 04 Mar 2020 18:15:08 GMT

No. That is not it. After redoing my federals I mistook the statement where it said about adding tincome from federal free income. Like municipal bonds.

Re: Virginia tax on US Saving Bonds

BillM223 — Wed, 04 Mar 2020 18:23:55 GMT

So you are saying that the Savings Bond interest is still appearing as both an addition and as a subtraction?

Re: Virginia tax on US Saving Bonds

hickory248 — Wed, 04 Mar 2020 19:08:58 GMT

No. I misread the statement about taxes that were exempt from federal income but taxed by state(s).

Re: Virginia tax on US Saving Bonds

Yatnola — Mon, 13 Feb 2023 01:31:37 GMT

I’m having a problem with this. The exempt box is not active on my federal return. How do I put the savings bond number into it?

Re: Virginia tax on US Saving Bonds

AnnetteB6 — Mon, 13 Feb 2023 15:09:35 GMT

Please clarify what you are trying to do with your savings bond interest and which state return you are filing. With more details, someone can provide you with a more complete answer.

Only certain states do not tax US savings bond interest. Those states are listed in the Federal return after you have entered the interest income you received. If your state is not on that list, then you may need to add the interest income to your state return, not subtract it.

@Yatnola

Re: Virginia tax on US Saving Bonds

Yatnola — Tue, 14 Feb 2023 00:47:25 GMT

Good Evening,

I'm sorry, I don't have any confusion. I think there is an error in Turbo tax.

According to the Commissioner of Tax for the Commonwealth of Virginia, there is no tax on US Saving Bonds. Please see his message:

https://www.tax.virginia.gov/[product key removed]ions/rulings-tax-commissioner/94-281

Please have the Turbo Tax CPAs double check this and issue an update to the application.

Thanks in advance for your kind attention.

Re: Virginia tax on US Saving Bonds

SteamTrain — Tue, 14 Feb 2023 01:04:28 GMT

@Yatnola

You are supposed to be putting your Savings bond interest into box 3 of a 1099-INT.

When entered there, it is included in the Federally-taxed interest on the form 1040, but it should automatically be deducted from VA income. (If the software is working right....line 4 of the VA Schedule ADJ).

Savings bond interest does not go in box 1...nor in box 8 of a 1099-INT form.

Re: Virginia tax on US Saving Bonds

ZTANN — Tue, 18 Apr 2023 05:27:27 GMT

Yes. It adds it to the Federal income and puts that figure on the State return, then it subtracts it on the State return, which brings it back to the same taxable total as on the Federal return. The Series EE savings bond interest income is supposed to be subtracted from the VA state tax return. How do you get that to work? It goes automatically incorrectly on the VA tax return.

Re: Virginia tax on US Saving Bonds

SteamTrain — Tue, 18 Apr 2023 11:29:14 GMT

@ZTANN

If you insist, and are absolutely sure that TTX is still doing it wrong (i.e. you printed out your forms and checked the lines where it's added a second time, then subtracted)

......then you need to call TTX and report it so that a correction ticket gets written up. They can get a diagnostic file from you and check all your entries and where they showed up in the VA software.

What is the TurboTax phone number? (intuit.com)

Re: Virginia tax on US Saving Bonds

sotto1158 — Sun, 11 Feb 2024 15:53:12 GMT

This is always tricky--but actually better this year on TurboTax. Make sure you specify the amount in the Federal 1099-DIV section. Then read the VA section very carefully and DO NOT enter the U.S. interest amount again (it's actually asking for something else). You can confirm that it's right by going to the VA Forms and making sure the amount is now just subtracted, without also being added.

Re: Virginia tax on US Saving Bonds

VolvoGirl — Sun, 11 Feb 2024 16:43:20 GMT

@sotto1158 Why did you say 1099 DIV section? Did you mean 1099 INT? You enter Saving Bond interest on a 1099 INT and put the amount in box 3 (not box 1). That's all you do. It is automatically subtracted from the state returns.

Re: Virginia tax on US Saving Bonds

JanAnnDan — Fri, 05 Apr 2024 01:17:48 GMT

When entering interest on TurboTax, there is a checkbox right below that section that you must choose in order for the Box 3 to be displayed. That is where interest from US treasury issues are entered, and will display in a different column. It's all right there and easy once you see it, but it is all too easy to zip through entering simple amounts like interest. This tripped me up the first time around, but when I located Box 3, the Virginia tax return was correct.