I have a new Mutual Fund which invests "at least 99.5% of total assets in cash and US Treasury securities." In my brokerage consolidated 1099-DIV I have a dividend from this fund and a non-reported section which says "State Reporting Information for Mutual Funds and Unit Trusts," which lists the fund and the dividend under US Treasury. What special handing do I need to do in TurboTax for this?
What I have done:
Enter the dividend, as per the 1099-DIV, in box 1a and 1b
Do I need to check the box entitled "A portion of these dividends is U.S. Government interest." ?
Do I need to do anything else? According to my State's Tax website, it says "United States Federal law requires the interest earned on federal bonds (U.S. obligations) to be included in gross income. <my state> does not tax this interest income." How do I ensure it isn't taxed on my TT-created State return?
Yes, check the box that the dividends are US Government interest, and then enter the amount of the dividends attributed to US treasury securities (presumably all of it in your case.) This will allow the dividends to be properly treated on your state tax return.
Yes, check the box that the dividends are US Government interest, and then enter the amount of the dividends attributed to US treasury securities (presumably all of it in your case.) This will allow the dividends to be properly treated on your state tax return.