Amend NM Tax Return to exclude Treasury Bill interest from NM taxable income.

[ArtH2]

I had 2022 interest on Treasury Bills that is not subject to state income tax. I need to file a form PIT-ADJ to list that income on my federal return that is excluded from NM state income tax. How do I do that using TurboTax? Turbo Tax does not provide Form PIT-ADJ.

[SteamTrain · Accepted solution]

Yes...if actually need to use the PIT-ADJ, it  is on the list of NM forms that TTX provides....so it should be in your forms....IF you have properly entered any additions or subtractions that should show up on that form.

1)  For individual Treasury Bills, Notes, or Bonds you own, any interest/dividends you received specifically from those would be recorded in box 3 of a 1099-INT form, from the US Treasury. When entered there in the Federal section of the software, the $$ transfer automatically to the proper place on any state's income tax forms.  In your case, line 8 of the 2022 PIT-ADJ for NM.

....1a)  if owned thru a Treasury Direct account, you need to download that 1099-INT from your online account, and enter those $$ in the Federal section as a 1099-INT with the $$ in box 3.

....1b) If owned and held in a brokerage, the $$ should be a part of the 1099-INT you enter into the Federal section of the software (again, box 3).

2) For collections of Treasury Bills, Notes, or Bonds you may have held in Bond mutual fund, or ETF...the $$ are included as a part of the box 1a $$ of the 1099-DIV form, that you enter in the Federal section of the software. Then on a page after the main 1099-DIV form, you can indicate that a portion of those $$ are from US Govt bonds, and will then get the opportunity to indicate the exact $$ amount that were from US Govt bonds/notes/bills. Those $$ will also automatically transfer to the State forms as a subtraction from state income.

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If you are in a situation where have already filed IRS and NM forms, and had them "Accepted", and you did not include those $$ properly in the Federal section, as noted above, then, after your original tax submission has been processed by both the IRS and New Mexico, you will then have to start an Amendment to both your Federal and State taxes. 

Whether you will owe more to IRS, or even need to file the Federal amended forms,  will depend entirely on which area you reported those $$ on the original forms (if you reported those $$ at all)....but the amended NM forms should result in some refund, unless you already had all your previous tax payments refunded in your original NM filing.

[ArtH2]

Thanks much for the explanation. Based on your explanation, I was able to correct the 1099INT data under the Federal Tax part and then do an amended NM tax return with PIT-X and PIT-ADJ forms. I've printed the amended return and will file it by mail.