Is turbotax incorrectly calculating line 6 in New Mexico Personal Income Tax Adjustment form (NM PIT-ADJ)? Even if you tell it different it treats federal = state exempt.

[jmmcgla]

I believe that turbotax is incorrectly calculating the value for line 6 in New Mexico Personal Income Tax Adjustment form (NM PIT-ADJ). Turbotax doesn’t differentiate between federal and state exempt income even when you input the state numbers in the ‘Tell us more about your exempt-interest dividends’ section for the investment.

Based on Vanguard’s document ‘Tax-exempt interest dividends by state for Vanguard municipal bond funds and Vanguard Tax-Managed Balanced Fund’, only 1.32% of the income is from investments is exempt from NM taxes. In particular New Mexico (0.65%), Puerto Rico (0.52%) and Guam (0.15%). This results in only a small amount of the mutual fund dividend being exempt from New Mexico taxes.

I input the following in the ‘Wages

[SteamTrain]

@jmmcgla 

Please continue to explain how you pulled out the NM-exempt $$ when you entered the 1099-DIV form

If box 11 on the 1099-DIV was ALL from that Bond Fund, then you had to break out the the NM-exempt amount.... so you should have entered on the follow-up page  (say it was $100 total in box 11):

NM      $0.65

PR      $0.52

GU     $0.15

Multiple states   98.68

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( But amounts at 0.49 or less may round to zero....so I'm not sure how the software handles that )

So a lot depends on what the total $$ were from that Vanguard fund for your account

.......if you had less than $100 in box 11, then it may not be worth your effort to bother breaking out the $$ as it could all round down to zero deducted from NM income on line 6 of the ADJ.  (Just say it was all from "Multiple States" in the top box).

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Side note...if that 1099-DIV has no $$ in either one of  boxes 1a, or 2a, you'll need to put a zero in box 1a....at least until they get a certain bug fixed...but a zero doesn't hurt if placed there. 

[jmmcgla]

Based on Vanguard’s document ‘Tax-exempt interest dividends by state for Vanguard municipal bond funds and Vanguard Tax-Managed Balanced Fund’, only 1.32% of the income is from investments in states exempt from NM taxes. In particular New Mexico (0.65%), Puerto Rico (0.52%) and Guam (0.15%).

Given the amount on line 11 of my 1099DIV, all of the NM-exempt amounts were well over a dollar.

The problem is Turbotax calculates the NM-exempt amount is equal to the ENTIRE federal tax-exempt amount. It puts the entire federal tax-exempt amount in line 6 of the NM PIT-ADJ form. This dramatically overstates the amount I can exempt from NM taxes. This results in a multi-hundred-dollar lower New Mexico income tax.

Perhaps I am misinterpreting something and someone can educate me.

BTW – Saw the same problem on 2019 NM income tax so I didn’t submit the Turbotax result.

[SteamTrain]

Certainly, there could be a software bug for the data transfer to the UT forms, and just the lower NM/PR/GU amounts should transfer to line 6 on the ADJ form... BUT...

Did you actually break out those exact amount son one of the follow-up pages after them main 1099-DIV form.  I ask because some folks think that simply importing the -DIV form info from Vanguard will automatically enter the state and territory $$ for them...and it doesn't.   ( maybe you did, but I have to ask to be sure )

Like the following example for a NC resident:

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[jmmcgla]

Yes I did. I input the following in the ‘Wages & Income’ tab ‘Tell us more about your exempt-interest dividends’.

I earned exempt-interest dividends in more than one state.

New Mexico $xx

Puerto Rico $yy

Guam $zz

Multiple states $remainder

[SteamTrain]

@jmmcgla 

First.... make sure you have at least a 0.00 in box 1a...don't leave that box blank.  There is a bug associated with that particular box, though I don't know if it affects this situation.   

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IF that doesn't help

Then your best bet would be to call Customer Support, they need to work thru the details in their software tests to see if it is a foul up in the NM software transfer, or something you are entering wrong, and then write up a ticket to get it fixed

https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632

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[jmmcgla]

Thanks for the input. Box 1a has a large nonzero number.

I will try to reach customer support on Monday and discuss this with them.

[rducotey]

This same problem is happening to me on my 2022 NM state tax return with Turbo Tax Premier online.  The total dollar amount is being deducted instead of just the NM part that I entered.  Bad BUG!!!

[SteamTrain]

@rducotey 

You REALLY need to call Customer Support...and report the issue there.

 It's highly unlikely that anyone with software team access will report this to get it fixed:

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What is the TurboTax phone number? (intuit.com)