Illinois Schedule M line 22

[curious-george2]

I have imported my 1099 forms from multiple brokerages.  I have added the "US government interest, if any, included in Box 1a" amounts in each 1099-Div.

When I (off-line) add together the amounts from: those 1099-Div entries, 1099-Int Box 3, and 1099-OID Box 8  AND compare it to the amount on TT populated line 22 of the Illinois Schedule M form - they do not match.

The Schedule M amount is significantly less. Some amounts I entered must have been excluded from this state form.

The Schedule M isn't editable in the "Illinois does things differently" section.

I can't find a worksheet that shows what was added together to obtain the Schedule M entry.  

[Mike9241]

illinois is a strange state. Box 8 interest may not be excludible for Illinois. As a matter of fact, a line 8 entry for Illinois interest on the 1099 does nothing. You have to go to the Illinois Schedule M and detail on the proper subline to line 34, the amount of Illinois interest. There are 26 possibilities. What's worse is that not every bond issue of the type listed on line 34 is exempt. Some depend on the date of issuance or other factors. 

Line 34 — Interest on tax-exempt obligations of state and
local government
Enter the amount of interest on obligations of Illinois state and local
governments included on Form IL-1040, Line 1, 2, or 3. This amount
is the amount net of any related bond premium amortization.
Interest from state and local government obligations is not exempt
from Illinois Income Tax except where legislation has been
specifically adopted to provide for an exemption.

The following is a list of securities that are exempt. However, income
from these obligations is not exempt if you own them indirectly
through owning shares in a mutual fund.
Securities exempt from Illinois Income Tax include
■ Illinois Housing Development Authority bonds and notes (except
housing-related commercial facilities bonds and notes)
■ Tri-County River Valley Development Authority bonds
■ Illinois Development Finance Authority bonds, notes, and other
obligations (only venture fund and infrastructure bonds)
■ Quad Cities Regional Economic Development Authority bonds
and notes (only those bonds declared exempt from taxation by
the Authority)
■ College savings bonds issued under the General Obligation Bond
Act in accordance with the Baccalaureate Savings Act
■ Illinois Sports Facilities Authority bonds
■ Higher Education Student Assistance Act bonds
■ Illinois Development Finance Authority bonds issued under the
Illinois Development Finance Authority Act, Sections 7.80 - 7.87
■ Rural Bond Bank Act bonds and notes
■ Illinois Development Finance Authority bonds issued under the
Asbestos Abatement Finance Act
■ Quad Cities Interstate Metropolitan Authority bonds
■ Southwestern Illinois Development Authority bonds
■ Illinois Finance Authority bonds issued under the Illinois Finance
Authority Act, Sections 820.60 and 825.55, or the Asbestos
Abatement Finance Act
■ Illinois Power Agency bonds issued by the Illinois Finance
Authority
■ Central Illinois Economic Development Authority bonds
■ Eastern Illinois Economic Development Authority bonds
■ Southeastern Illinois Economic Development Authority bonds
■ Southern Illinois Economic Development Authority bonds
■ Illinois Urban Development Authority bonds
■ Downstate Illinois Sports Facilities Authority bonds
■ Western Illinois Economic Development Authority bonds
■ Upper Illinois River Valley Development Authority Act bonds
■ Will-Kankakee Regional Development Authority bonds
■ Export Development Act of 1983 bonds
■ New Harmony Bridge Authority bonds - Note: For tax years
beginning on or after August 19, 2023, the bonds issued by the
New Harmony Bridge Authority are no longer eligible for income
exemption.
■ New Harmony Bridge Bi-State Commission bonds - Note: For tax
years beginning on or after August 19, 2023, the bonds issued
by the New Harmony Bridge Bi-State Commission are no longer
eligible for income exemption.
For more information see Publication 101, Income Exempt from Tax.

PUB 101 

[curious-george2]

Illinois is a strange state.

Line 34 covers interest on tax-exempt obligations of Illinois State and local governments. You would think the percentage of dividends from a mutual fund holding those bonds would count.  But, no - the IL code requires you to be the direct holder of the bond and not an indirect owner through a mutual fund for example.

Line 22 covers interest from the federal government.  These are two different things.

My question amounts to what did TT add together to get the amount it populated line 22 with?  Is there a worksheet that shows this to the user?  

When I add together what was imported (and then added to by me) from the brokerage houses I get a much larger number.

If I subtract the Box 8 number (meaning it isn't excludable in Illinois) from my sum I get a number much less than what TT put in Line 22.

[curious-george2]

And the answer is ....

After importing the various 1099-Cons forms, TT broke them up into the respective 1099-INT, 1099-DIV, 1099-OID, and the assorted Sch B capital gains forms.  

I made the accrued interest adjustment (all US government notes) to the correct 1099-INT.  However, there were multiple sources of interest on the form and TT allocated the adjustment to each of the sources, proportionally.  That meant only a subset of the adjustment discount went to the US Government offset for the Illinois form, i.e., line 22 on Schedule M.

The solution is to create another 1099-INT that only holds the US government interest and apply the adjustment to that form. (Remembering to delete that interest from the original form.)  Unfortunately, that instruction is in the notes in a manner not obvious enough for me. So, I got to play around to uncover the issue.

Maybe this will help someone facing a similar dilemma.