How to report a gain from maturing H-ser US Treasuries(1099-B, Box 1f) in TurboTax so it correctly appears as a subtraction for U.S. obligations on Virginia Schedule ADJ?

[VA_Perplexed]

If I manually add it in VA's Schedule ADJ then it comes with code 99 and in different section than "Subtractions Income (US obligations / securities) ".

[AmyC]

It is a 2 step process that begins in the federal section.

Federal:

1. Open to Federal > Wages & Income > Investment Income.
2. Edit your 1099-B.
3. continue through entries
4. Look for a checkbox or a follow-up screen that asks, "Tell us more about these sales" or "Any special situations?"
5. Select the box that indicates these are U.S. Government Obligations or U.S. Treasury Bonds. This "flags" the income as being derived from a federal source that is typically exempt from state tax.

State:

1. Open to State tab for Virginia.
2. Go through the Virginia interview. Do not manually enter it in the "Other Subtractions" screen yet.
3. Look for a screen titled "Any Subtractions from Income?" or "U.S. Government Obligations."
4. Because you flagged it in the Federal section, TurboTax should display a list of your investments and ask you to confirm how much of that gain came from U.S. Obligations.
5. Enter the amount , if asked.

Great job catching the code 99!

[baldietax]

@AmyC I think many users would love to see this solution for AMD on Treasuries to flow as a subtraction to state returns, but when I enter a sale (on Mac Desktop Premier) this option does not exist?

[VA_Perplexed]

This is correct. I am not seeing the option which Amy had mentioned in TT Premium on Windows and also on Android. This appears to be a gap in TurboTax, which they will hopefully address in one of the upcoming releases.