Maryland capital gains deduction

[dereklewis191]

I am working on my 2020 Maryland state taxes, and I have arrived at the page labeled "Capital Gains on U.S. Obligations are Tax Free".  There are two boxes on this page, one lists the federal total capital gains and the other (blank) for Total From U.S. Obligations.  Reading the associated Turbotax help page and the Maryland bulletin, I am unclear on what gets entered here.

From the Maryland bulletin, the dividends and capital gains from U.S. obligations are deductible although the page only indicates capital gains.  Is that an error?

[ThomasM125]

You will just need to enter your capital gains associated with US securities that are exempt from tax on the page where that information is requested.

After you enter your dividends from form 1099-DIV, you will see a screen on which you are asked if any of the dividends are from US obligations, and when you say yes to that question, you will be asked to enter the state they are exempt from. Once you answer those questions accurately, your dividends on US obligations will automatically be reported as exempt income on your Maryland return.

[dereklewis191]

Most of the fund distributions for US obligations are listed as “income” not capital gains or interest. Would I assume this was a dividend or capital gain entry?

[dereklewis191]

In my case there are no capital gains from US obligations. When I finished my entry, no further questions come up regarding dividends or interest that are from US obligations.

[AmyC]

Income is all encompassing. Your additional paperwork would have to show the various types of income. The accompanying forms should list any federal and state exemptions allowed. If it states income from US Obligations, it will be state exempt.

[dereklewis191]

I returned to the 1099 entry page and I see the check for "exempt US income" if I remember correctly.

[AmyC]

Exempt from Federal would mean a state or local investment created the income. It could be that you have capital gains and none of it came from US obligations. In which case, blank is the correct answer.

MD does not tax federal interest and dividends. See Maryland Income Tax- Administrative Release No 13