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Level 1
posted Apr 18, 2021 7:54:04 AM

New York interest income on state bonds - suspected new error in TurboTax software this year

I believe TurboTax made a calculation error on my NY tax form IT-201 line 20.

 

TurboTax included my interest income on NY bonds, even though that should have been excluded.

 

This may be an error that's new this year.  In previous years I did not have this issue.

 

Is there anyone at TurboTax that could check on this?

0 2 496
2 Replies
Employee Tax Expert
Apr 20, 2021 7:43:19 AM

If you need to exclude your interest income from bonds on your NYS return, you must do so on the page Changes to Federal Income. 

 

Please follow the instructions below:

  1. Open your return.
  2. Click on State on the left hand side.
  3. Continue through your return until you get to the page Changes to Federal Income.
  4. Scroll down to Investment adjustments.
  5. Click Start next to US government or NY state exempt income.
  6. Follow the on-screen instructions. 

Level 1
Apr 25, 2021 11:35:55 AM

I appreciate the detailed suggestion.

 

Unfortunately, it doesn't seem to be an adequate solution.  This suggestion leaves the New York state bond interest income on the tax return, and then subtracts it out later on the tax return.

 

I'm looking for a solution that following the instructions on the New York state tax return form, which states that New York State bond interest income should not be included in the first place.