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New Member
posted Mar 19, 2020 2:28:25 PM

In entering federally tax exempt interest and dividends, I selected "more than one state." How does TurboTax then calculate what portion is taxable in my state return?

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2 Replies
Employee Tax Expert
Mar 20, 2020 12:27:54 PM

TurboTax will pull the information you have entered into the state interview section. 

 

You will see screens asking how much was from your resident state when you go through the state interview questions. 

 

Be sure to answer each question and enter the correct amount in your state return to ensure the correct amount is reported as tax-exempt or taxable depending upon the situation.

 

New Member
Mar 22, 2020 6:40:35 AM

Thank you for the reply.  After some more analysis, I learned that the program was not carrying one of my multi-state entries to the state tax form.  When I had originally entered it, I tagged it as my home state mistakenly then corrected it in the edit process.  For some reason, the program still flagged it as my home state even though I had changed it.  In the end, I deleted the amount from the 1099-DIV that I had imported, saved it, then added the amount back with the multi-state entry.  The effect was all of the tax exempt dividends carriers over to the state return, which is what I expected.  

 

My previous CPA used some industry database which would take the 1099-DIV information and calculate a % that was from my home state, and thus not taxable there.  My original question was thinking the program did something similar, but in fact, it was simply an error which I had to work around.  Thanks.