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New Member
posted Jan 28, 2023 7:31:19 PM

Can anyone tell me what this means? I haven’t lived out of state since 2017. “We noticed that you received exempt interest from state obligations.”

It’s asking me to provide an interest amount but how do I know the amount when I don’t even know what it’s for?

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1 Replies
Level 15
Jan 28, 2023 7:53:15 PM

You get that from your mutual fund company. If they did not provide a breakdown, you check the box “I earned tax exempt dividends in more than one state” ("Multiple States" in the  online program) on the first screen after entering the 1099-INT or 1099-DIV. Then select  "More than one state" (or "Multiple States") at the bottom of the state  scroll down list.

 

If your mutual fund company provided you a breakdown*, you are only interested in your home state*. Multiply the % for your state by your total tax exempt dividends to get a $ amount (you can't enter the % in TurboTax [TT]). When asked which state, check the box "I earned tax exempt dividends in more than one state". In the drop down menu, select your state and enter the $ amount you calculated. In the 2nd box, select "More than one state*" (at the bottom of the scroll down list) and enter the remaining dollar amount.

 

*Most mutual funds will provide a breakdown. But you usually have to ask for it, or find it on their web site.

 

**Your state will tax all the dividends except the dividends from municipal bonds  from your state and US Territories. In Illinois, only certain of its municipal bonds are state tax-exempt.