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gckc
Level 3

exempt government obligations

Exempt U.S. government obligations that are entered on the Federal form come across as doubled when they are transferred onto the Missouri state taxes.  Can anyone explain why???

 

It is being entered under U.S government interest when selecting the option of " A portion of these dividends is U.S government interest".

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3 Replies
MonikaK1
Employee Tax Expert

exempt government obligations

If you have US Government Interest reported on a Form 1099-DIV and it is reported as Dividends:

 

  • Enter your Form 1099-DIV exactly as the boxes appear in the 1099-DIV section including exempt-interest dividends.
  • Click Continue
  • At the screen "Tell us if any of these uncommon situations apply to you", check the box next to "A portion of these dividends is U.S. Government interest". Click Continue.
  • The next screen states "Enter U.S. Government Interest". Enter the amount in the box provided. Click Continue.
  • The next screen asks which state(s) your exempt-interest dividends are from. You can enter the amount for each state here. Click Done.

 

The Learn More link in one of these steps explains:

 

The U.S. government taxes income you receive on its own bonds. Your state does NOT tax income from U.S. government bonds, but each state defines government bonds differently. You should check to see if any part of these dividends is taxable in your state. This information is usually included with the 1099 you received from your broker. You may also be able to get this information from your mutual fund company's website.

 

Based on this information, enter an adjustment for the amount your state does NOT tax, and the TurboTax State program will subtract this amount from your state income.

 

Interest income from Treasury bills, notes, and bonds is subject to federal income tax, but is exempt from all state and local income taxes. See this IRS webpage for more information.

 

If you lived in more than one state during the tax year, you should prepare the earlier nonresident/part-year resident state return first and then the return for the state where you lived at the end of the year, to get correct results. If you prepared them in the wrong order, you can delete them and start again.

 

Different states treat the income allocation calculation differently. Complete the TurboTax interview for the earlier state, and make the correct interest income adjustment where prompted. When that return is complete, then complete the state interview for the later state.

 

See this TurboTax help article for more information about splitting income between states.

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gckc
Level 3

exempt government obligations

Please read my next post and reply chain which was posted today.

 

https://ttlc.intuit.com/community/state-taxes/discussion/re-u-s-government-obligations-software-erro...

 

It is a software bug and nothing to do with my entry of the data or a lack of understanding of the deduction.

 

I spent over 6 hours on the phone with another tax expert and her manager last week and we got nowhere. They ultimately had nothing to offer but try some things on my own to get the error to go away.

 

I figured out how to trigger the error in the program myself which causes  a false tripling of the proper deduction.

 

If you wish to provide a method to provide the document I created to a "developer" so TT can correct the bug then great. 

 

Please read the post and the chain from today which I have provided a link to above before replying to this, if in fact you choose to reply.

MayaD
Employee Tax Expert

exempt government obligations

The only way for us to take a deeper look at the issue is for you to send us a diagnostic file. The file won't have your personal information. 

When you import your tax form from the source, if it is not matching your tax document we recommend that you delete the form and enter it manually. 

 When you re-enter the form, select I'll type it myself. Enter amounts as showing on your form. 

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