It asks for state for tax-exempt interest?

[panad65]

Should I just put my state?

[BMcCalpin · Accepted solution]

If you have municipal bonds (which are tax exempt at the federal level), then enter the state where the municipality is located. Why? Because municipal bonds from one state are often taxable in another state but not in the same state as where the municipality is.

There may be other reasons; in general, I would say enter the state of origin (where the Payer is located).