Can't get state tax exempt interest-dividend to report properly on PA return.Have selected more than one state;then PA in dropdown & multiple states in next dropdown-BUG?

[taxquestion1232]

I had this issue today. It was caused by making edits to the 1099-DIV.

Try first deleting the 1099-DIV completed in the federal section. Then recreate it, entering all information as explained by StreamTrain. That worked for me. When I did, Turbo Tax correctly took the one 1099-DIV from federal and split it into two for state: for the the in state piece (exempt) and one for the out of state piece (not exempt).

I agree it is a bug that you cannot edit the 1099-DIV without breaking it. It seems the only way to fix it is to delete it and start over.

Hope this helps!

[hmillerj]

Thank you to both of you for your help and advice. 

[SteamTrain]

@taxquestion1232   Ahhh...true.

Sometimes an imported 1099-DIV has some digital garbage in it that messes it up...or if the 1099-DIV was transferred in empty from last year , and you re-used it...sometimes that form can have "issues".   Deleting the form entirely, and re-entering it manually as a newly created form works.

[SteamTrain]

@hmillerj 

And the potential Fix that @mstuart1151  suggested?  for two 1099-DIV forms ?

That wasn't double-entering the same $$....what was suggested for your situation would be to:

1) have one 1099-DIV with your boxes 1a,1b, 2a $$ in it....and then only the box 11 $$ from the non-PA states in it too....thus all tagged as "Multiple States".

2) then a second 1099-DIV, with only the box 11 $$ from PA bonds in it.....all tagged as coming from PA .  (and boxes 1a, 1b, and 2a empty.....(((sometimes a zero has to be put into box 1a if only box 11 has a value)))

So the box 11 $$ on the original 1099-DIV is divided up among #1 and #2 in the two 1099-DIV forms.

[ThomasCKo]

I have this issue too, and it STILL doesn't seem to be resolved by TT in 2022  (other than a suggested 2020 workaround - which I could otherwise also repair by using paper instead of buying Turbo tax). 

For example, I live in Maryland and have multiple bond tax free bond accounts, which total about 50,000 for my income.  They range, but approx 1-2% is applicable for MD only.  This would be about $1000 that should be excluded from state tax, but TT seems unable to handle simple calc on program, and I would pay considerably more tax than required due turbotax inability to handle

For example

Resident state :                                            MD

Total Fed Exempt From 1099s :                50,000

MD exempt (from div details)          MD      1,000   (should be excluded from MD tax)

Not  exempt MD  (all other states)            49,000   (Need to be included for MD tax)

First time using TT, not impressed.   While you all are great in trying to help, do we have to rely on a 'community' for programing shortcomings and 'paper erasing' workarounds?  Should we help them program? This is crazy.  Maybe Im doing it wrong but have tried multiple times on the Tax year 2021 Premier version.  Thxs to anyone who knows !

[RaifH]

To exempt your state sourced dividends from state income tax, a workaround is not required. In addition to Maryland dividends being exempt from state tax, if any dividends were sourced from a U.S. territory they are also tax exempt in Maryland:

• Puerto Rico.
• Guam.
• US Virgin Islands.
• Northern Mariana Islands.
• American Samoa.
• Midway Atoll.
• Palmyra Atoll.
• Baker Island.

To enter this in TurboTax:

1. Enter your 1099-DIV in Federal > Wages & Income > Interest and Dividends > Dividends on 1099-DIV section of your return.
2. Click Yes.
3. Federally exempt dividends should appear in Box 11 that are from state sources.
4. After one screen, it will say Tell us more about your exempt-interest dividends. Select I earned exempt-interest dividends in more than one state.
5. Select Maryland from the drop-down and enter the amount of dividends from there. If you have any from the U.S. territories, you may enter those as well.
6. Rather than entering all 50 states, the taxable portion can be handled by using Multiple States at the bottom of the dropdown and put in the remaining dividends. The total for all states must match the amount entered in Box 11.

If your 1099-DIV was imported, you may have to go in and edit the form to properly allocate the tax exempt dividends. You may have to delete it as @taxquestion1232 said and then re-enter it if it does not seem to be carrying through to your state return. You should see the taxable portion of the exempt dividends as an adjustment to income on your Maryland return. 

@ThomasCKo

[SteamTrain]

@ThomasCKo 

For every 1099-DIV that has box 11 $$ in it, and for every 1099-INT that has box 8 $$ in it...you deal with the MD part in the follow-up page as @RaifH  described.

BUT

Here's an example for an NC resident, when using the "Online software (Desktop is similar)

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