As requested, I asked Vanguard which state(s) is the $2173 of exempt interest from. no idea. Any other suggestions? They sent me exempt rate for all states.

[mikecfmo-gmail-c]

I have never needed to provide this info in past.  Please explain how I determine this?

[ErnieS0]

You only need the exempt percentage from your state. Exempt interest is tax-free on your federal return, but is taxable to state, except for the percentage relating to your state. In TurboTax divide your exempt interest into your state interest and multiple state interest.

Suppose you had $1,000 in exempt interest dividends. 10% is from Alabama and you live in AL. Enter 10% of $1,000 in AL and the rest as Multiple States. TurboTax will make an adjustment on your AL return.

If it sounds too complicated, you can skip the whole thing. You'll be paying more state tax than necessary. Or you can speak with a Tax Expert.

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[SteamTrain]

1) Easiest answer/procedure...just select "Multiple States" in the top box and move on..

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2)  More complicated process ( which you are not required to do, but can do if it actually saves you some state taxes, of course, it may not save you anything).

You have to take the supplemental information about the bond fund, or funds you owned , and calculate the exact amount of exempt interest that came from your own state's bonds...so if one of your Bond funds issued $1000 of exempt-interest, and your state produced 2% of that, then you can break up the $1000 as $20 from your state, and $980 from the rest....that could save you a whole $1 in state taxes......but again, you have to calculate those exact amount yourself, and keep a record of those calculations in a tax folder.

(note, for a 1099-DIV, box 11, this is not allowed by Illinois, and residents of CA & MN have severe restrictions on when it is allowed.  Utah residents can also include bond exempt-interest from a a few other states).

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An example for an NC resident is as follows: