topic US bond income exempt from federal taxation in State tax filing

US bond income exempt from federal taxation

dhanig2 — Sat, 13 Mar 2021 19:54:36 GMT

Does US bond income exempt from federal taxation include state, county, and municipal bonds, or does it only include US Federal Government bonds?

Re: US bond income exempt from federal taxation

SteamTrain — Sat, 13 Mar 2021 20:51:05 GMT

where do you see "exempt from federal taxation" ?

US govt bond interest is not exempt from Federal taxation.

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if it really says exempt from state taxation.....then

NO...that specifically refers just to US Govt bonds.

IF on a 1099-DIV form, it refers to a sub-part of the box 1a $$ that are showing on the -DIV form.

the "Muni"s you are referring to go into box 11 of a 1099-DIV.

Re: US bond income exempt from federal taxation

dhanig2 — Sat, 13 Mar 2021 21:32:59 GMT

While doing my Virginia income tax, Turbotax has a whole category entitled "U.S. Bond income exempt from federal taxation" that Turbotax says is treated differently by Virgina than by the Federal Government. I do have income from municipal bonds from other states, but no income from Federal Government bonds, so I want to know whether I should enter the figures into the boxes provided by the Turbotax program.

Re: US bond income exempt from federal taxation

SteamTrain — Sun, 14 Mar 2021 12:29:32 GMT

Sorry, I don't have the VA Software to check to see what VA is doing there. Might be worded improperly, or may be something special in the VA interview.

@DJS are you around and working on VA this year? Is this something special in the VA interview......the wording about US Govt Bonds being "exempt" from federal taxation seems wierd...or just plain wrong.

Re: US bond income exempt from federal taxation

ThomasM125 — Tue, 16 Mar 2021 03:01:57 GMT

Bond income exempt from federal taxation would include municipal (state) bonds. On the Virginia return, you get an exemption from state taxation for interest on Virginia bonds, so they would be the ones you would be concerned about.

Re: US bond income exempt from federal taxation

allenkski111 — Sat, 14 Oct 2023 00:09:24 GMT

I also was wondering about this question, two years later. @dhanig2 was correct about the odd wording in the VA state tax interview question. Wish TT would revise it.