Is IRS interest payment non-taxable in New Jersey

[jman3]

I received a 1099-INT from the IRS because they took a while to process my refund last year and so there was some interest that they paid me. I live in New Jersey and when I enter the form, it allows for special handling if the interest is taxable federal but NJ state tax-exempt (based on New Jersey Bulletin GIT-5).

I understand that standard interest from a bank savings account for example is taxable (and I would not check the box in that case), but is interest from the IRS considered to be similar to a bank (not check box), or is it tax-exempt in New Jersey (and check box)? Thanks!

[rjs · Accepted solution]

The interest from the IRS is not tax-exempt in New Jersey. It's ordinary interest, the same as from a bank.