The law regarding U.S. Treasury income has not changed. Federal interest is exempt from state taxation. To enter exempt-interest dividends in TurboTax
- Type dividends in Search in the top right
- Click Jump to dividends
- Click Review next to the dividend that has U.S. Treasury interest
- On the screen Let's get the info from your 1099-DIV, check the box near the bottom My form has info in other boxes (this is uncommon)
- Enter your Exempt-interest dividends in Box 11. Continue.
- On Tell us if any of these uncommon situations apply to you check A portion of these dividends is U.S. Government interest. Continue.
- Enter the amount of U.S. Government interest. This will be subtracted from your state return.
We're actually talking about box 1a on the 1099-DIV, not box 11. There is a follow-up page where you indicate what sub-part of box 1a $$ came from US Govt bonds, so that income won't be taxed by whatever state is involved.
This IS a software bug in the "Online" software only (not in Desktop).....and as yet, we have no indication out here or in the FAQs, that TTX is working on fixing this BUG.
See actual test numbers and confirmation of the problem here....and please report the problem up-the-line as a real software bug that needs fixing: