1099_INT not calculated correctly when choosing pulldown "my state doesn't tax all this interest"

[jmp51]

When I input out of state interest(choosing the pull down- "my state doesn't tax all this interest") it is being categorized on my Massachusetts return as in state interest. When I don't choose the pulldown but check (none of these apply) it is being excluded on my Massachusetts return. This is exactly opposite of what should be happening, 

[AnnetteB6]

We would like to take an in-depth look at this situation and submit more information to the development team if necessary or try to provide a solution for you.  It would help if we could use a diagnostic file of your tax return to be sure we are seeing the same thing you are.  The diagnostic file will not contain personally identifiable information, only numbers related to your tax forms.  

If you wish to send a file, use the following instructions and then post the token number along with which version of TurboTax you are using and what state return you are filing in a follow-up thread.

Use these steps if you are using TurboTax Online:

• Sign in to your account and be sure you are in your tax return.
• Select Tax Tools in the menu to the left.
• Select Tools.
• Select Share my file with agent.
• A pop-up message will appear, select OK to send the sanitized diagnostic copy to us.
• Post the token number here. 

If you are using a CD/downloaded version of TurboTax, use these steps:

• Select Online at the top of the screen.
• Select Send Tax File to Agent.
• Click OK.
• Post the token number here.

[jmp51]

I do not feel comfortable providing the file. JDCU/MVCU are an examples of  banks that are in Massachusetts.  In order to get them to appear correctly on the Mass Form 1 I had to choose “My state doesn’t tax all this interest”, when in fact it does. As you can see the sum was reported on Mass Form 1 and categorized on Mass form Int Inc Stmt. As you will also see both AMEX and Pen Air FCU are not reported as Mass interest, when they should be, since I did not check the exclusion box. In summary when I chose the 'exclusion' box the $$ are NOT counted as Mass Interest and when I leave it blank they are. This is opposite to what should be happening. 

[jmp51]

This were deleted from the previous answer .

[jmp51]

Is this issue being investigated?

[AnnetteB6]

Looking into this situation further and reading the instructions for the Massachusetts income tax forms, the state does tax all interest income at the same rate regardless of the source of the interest.  However, if the interest income is from a Massachusetts source, then you are allowed an exemption amount of $100 (or $200 for Married Filing Joint).  This means that you would not pay tax on up to $100 of interest income when the interest came from a Massachusetts source.

The only way to indicate that the interest is coming from a Massachusetts source is to select the check box  that says 'my state does not tax all of this interest'.  This indicates that there is special handling of this income item on the state tax return.

When this was tested, everything seemed to be working properly and as expected.  

@jmp51