Where do I enter "Income from obligations of the US government included in Federal AGI but exempt from state income taxes"?

[derekstow]

In Turbotax Deluxe online, how do I enter "income from obligations of the US government included in Federal AGI but exempt from state income taxes"?

[ThomasM125]

That would be savings bonds and treasury interest that would be entered from box 3 on a form 1099-INT. That would be entered in the Federal section of TurboTax, then Income and Expenses, then Interest and Dividends, then Interest on 1099-INT. Enter the amount in box 3 of the 1099-INT entry.

[derekstow]

Thanks for the reply.

But the income concerned was reported on a form 1099-Div with other types of income included in the same box. My mutual fund company then provides a separate list for each fund of "income from obligations of the US government."

For federal purposes the whole of the income in the box is taxable. But for state purposes the income from obligations of the US government is not taxable. In previous years when I used the desktop version of TurboTax I could enter the " income from obligations of the US government" amount to be deducted from federal AGI when calculating my state taxes.

If I just report this as 1099-INT income, won't it still be included in state taxable income.?

[ThomasM125 · Accepted solution]

After you enter your form 1099-DIV, you will see a screen that says Tell us if any of these uncommon situations apply to you. One of the responses is A portion of these dividends is US Government interest. If you check that option, you can enter the portion of the income that is from US obligations and it will not be listed as taxable on your state tax return.

[Shingle]

Turbo is not allowing it on state tax 

[JohnW152]

What state are you working on?  States have varying inclusion and exclusion policies.

@Shingle

[Shingle]

Colorado

[AmyC]

Page 11 of DR 0104 Book shows the disallowed amounts. If it is interest reported on a 1099-div, in the federal section, after entry, check uncommon situation applies - a portion of these dividends is US government interest.

In the state of CO, you can make entries under Investments, interest from US government sources.

@Shingle