1099 INT taxable for NJ state

Is 1099-INT income recieved from the banks taxable from the Box 1for NJ state? While it is required for federal, turbotax doesnt have a clear guidance on it and every turbotax agent is giving their flavor of the answer, one says to check the NJ speacial treatment and select the NJ state in the dropdown box, which is allowed for the 6 states that have the exception for 1099-INT interest reporting.

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Expert Alumni

Apr 2, 2025 11:01:52 AM

Do not check the special handling box for interest on savings accounts, checking accounts, and certificates of deposit (CDs) received from a bank, credit union, or savings and loan association, including interest received from a bank, credit union, or savings and loan association located online or located in New Jersey.

You need to Check the special handling box and in the dropdown list for interest that is taxable on your federal return but tax-exempt in New Jersey.

Exempt interest income include:

Interest and gains from government debt obligations (such as bonds) of the State of New Jersey or its political subdivisions. These subdivisions can include municipalities, counties, school districts and authorities;
Interest and gains from debt obligations of the federal government, such as U.S. Savings Bonds and Treasury Bills;
Certain distributions from New Jersey Qualified Investment Funds.
Distributions from mutual funds on interest earned from federal debt;
Earnings on distributions from qualified State tuition programs. This includes the New Jersey Better Educational Savings Trust (NJBEST) program; and 
Earnings on tuition savings programs formed under Section 529A of the Internal Revenue Code. This includes the State’s Achieving a Better Life Experience (ABLE) program.

Nontaxable Investment Income

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1099 INT taxable for NJ state