I am having trouble with two items on my 2024 1040 and 2024 IT-201 NYS returns. I own both NY municipal bonds and out of state municipal bonds from various states. I created two 1099-s forms based on the information from my 2024 1099 issued to me from my brokerage firm. One is for all the out of state municipal bonds. I do indicate the total amount of out of state municipal income. I even break it down by state. I also indicated what out of state municipal bond premiums are reflected on box 13 of my 1099. I do not check the box that says I need to adjust any items on that 1099. The other 1099 is for my NY state municipal bond interest. I put the amount of my NYS municipal bond interest on the 1099 and then I put the NYS municipal bond premium in box 13. I also make an adjustment to the NYS municipal interest by clicking the edit button and entering the accrued interest I paid to purchase a NYS municipal bond in 2024. The problem is the following. No matter how I enter the out or the amount I enter for out of state municipal bond premiums it has no effect on my NYS taxes. How can this be? Is it not reasonable to assume that that the out of state municipal bond premiums should be deducted from my out of state municipal bond income and therefore result in either a bigger state refund or less taxes due? Why does Turbo Tax does not make any adjustment on the state level. Also, I am frustrated that Turbo Tax will not provide me with the how it arrives at the NYS additions reflected on my IT 201 form. It gives some long explanation as to the inputs, but I can't find the calculations / figures used by Turbo Tax anywhere in the program. Please advise. Thank you.
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Hi yes it's annoying there is no breakdown from the state return additions and subtractions to help tie out and identify issues, I've found the only way to do it is to track the expected figures offline and if they don't hit then go over all the 1099s with fine toothcomb until finding the issue.
It sounds like you've set up the 1099s correctly to isolate muni interest and it's adjustments for NYS and out of state.
The problem you're describing sounds like an issue that I've seen a few folks report whereby the out of state munis don't have any effect on state i.e. behave as tho in-state. It's something to do with the state allocation setup (NY vs. Multiple States etc) so and I would double-check this on the 1099-INT. It may look ok but based on a few posts there seems to be some sequence of steps of changes which cause this to get messed up behind the scenes.
If you are on desktop, bring up the 1099-INT in forms mode and under Box 8 it will show the state allocation grid, at the bottom there is an additional line "State ID where exempt interest was earned. If more than 1 state, see Help". That should be set to XX instead of NY. If you change anything in Forms mode make sure to go back thru EasyStep and ensure it's not in yellow "Review" status.
One thing you can also try is to re-input the out of state 1099-INT again and see if that clears the issue.
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