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secreto4847
Returning Member

How do i add tax-exempt interest to my state tax return?

add tax exempt interest to my Georgia state tax return
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3 Replies
Hal_Al
Level 15

How do i add tax-exempt interest to my state tax return?

Enter at the 1099-INT screen, even if you didn't actually get a 1099-INT.  TurboTax will automatically add/transfer anything in box 8 of a 1099-INT (or box 11 of a 1099-DIV) to the state return.

 

@DoninGA 

secreto4847
Returning Member

How do i add tax-exempt interest to my state tax return?

Thanks for reply, but that doesn't answer the question.  I want to add "tax-exempt interest" (which is not included in Federal taxable interest) to Georgia state taxable interest.  In addition, this amount should also be added to the Georgia Retirement Income exclusion.

pjanas1
Returning Member

How do i add tax-exempt interest to my state tax return?

GA Schedule 1 Additions to Income, Line 1,  is where you add Non-GA tax exempt interest income.  GA Taxable income is adjusted higher by this amount.  If you are eligible for the Retirement Exclusion, (calculated on sch2 pg 2)  TurboTax makes the Subtraction to Income amount on line 7 larger that it should be * by including Non-GA tax exempt interest income here also.   So TurboTax uses that amount in  Schedule 1 twice - once as an addition and one as a subtraction.   You may like this because it lowers GA adjusted gross income (Form 500, p2, line 10) and therefore your GA tax.  The GA 2021_IT-511_Individual_Income_Tax_Booklet, Retirement Exclusion pg 16, does not  state that the taxable income numbers from Federal Form 1040 lines 2-5 are to be adjusted before entering them on the Schedule1 Retirement Income page.   Form 500 makes those adjustments adjustments on Schedule 1, line 1.  The same issue exists for Interest on United States Obligations.

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