Series ee bond interest , why is it carrying over to Pa state return?

[HelenC12]

@Spin    Are you getting taxed on the PA return for the Bond EE interest?

• I recreated the Bond EE interest and it carries over to the PA state return, from the federal return. It is on the Interest Income Summary screen however, PA does not tax it. If you are not getting taxed on the Bond interest, do not make any adjustment.
• Note: When I entered the adjustment, it did not affect my refund or amount due.
• Make sure you entered the Bond interest correctly on the Federal return. See the screens below. I've included the Online version and the CD\Download version.

Per PA Department of Revenue: Interest from direct obligations of the United States Government, the Commonwealth of PA and political subdivisions of Pennsylvania is not taxable for PA purposes. The interest from U.S. Treasury Bonds, Notes, Bills, Certificates, and U.S. Savings Bonds is not taxable; the interest you receive from obligations of other states or countries is taxable income.

[Edited 3-11-2020|6:12 am PST]

[Spin]

I followed your instructions and entered the amount as positive. I question marking U.S. Savings Bond Previously Reported because it was not previously reported on any tax return. Is this still ok to mark?

[ptrgolfguy]

The state return worksheet for interest showed the 2 interest figures along with other interest all in same 1st column

it then showed the same figures to the far right but it also showed 0 as far as taxable.

However, T.T. kept pushing me back to this  until I ended up moving the two interest figures from first column to second column and applying the code "U"  I then put in zero to replace where the totals had also showed up to the far right of first column, again this seemed to satisfy T.T. but in final reviews they seemed to be questioning the "u" code so I just kept pushing continue to get past.  T.T. never questioned my entries of the interest on Federal but it looks as though the interest fell into the wrong area when transferred to the PA state worksheet.  In the end I was not taxed but spent a lot of time trying to override the data.  I went ahead and bought Audit insurance in case the state doesn't like what's on the return forms. If I remember correctly, there was a page that indicated what states did not tax this return and PA was NOT listed.  Can this be corrected for next year?  I still have more bonds to redeem.

[Cynthiad66]

I will submit your concern to the tech team and hope that it gets a priority rating for working on this issue.  Thank you for bringing this to our attention.

[DTP1]

So was there ever a resolution?

The displayed screenshots don't look like anything I've seen. PA doesn't tax EE interest income. "Pennsylvania" doesn't appear on the (partially) exempt list of states. 

What do I do on TT 2022?

Thanks.

[ErnieS0]

You can make an adjustment in TurboTax CD/Download.

See How do I switch from TurboTax Online to TurboTax CD/Download?

Once you are in Pennsylvania, go to “Interest Income Summary” and EDIT your U.S. Savings Bonds.

1. On “Adjust Federal Interest Income,” say YES
2. On “Adjust Federal Interest Income,” enter the total amount in Adjustment Amount and choose Other adjustment.

This will make your Saving Bond interest non-taxable for PA. However, it will put the subtraction on line 8 instead of line 7 of PA Schedule A. 

You can print this form, white out the description and amount on line 8, and enter the amount on line 7.

The Override Method

You can also override your entries.

1. Tap Forms in the top right corner
2. Find Sch A TP or SP. If you do not see this form in the left column, select Open Form, click on + next to Pennsylvania and highlight Sch A TP or SP, then Open Form
3. Change line 8 to $0
4. Highlight Box 7, then right click and select Override or tap CTL-D on your keyboard
5. Enter the correct number

An override will prevent you from e-filing your PA return and voids the 100% Accurate Calculation Guarantee.

@dpp1

[ES36]

I'm wondering if the OP didn't put the bond interest into Box 1 instead of Box 3 on the TT Interest Income report page.  Putting it into Box 1 makes the state return oblivious to the fact that this bond interest is not taxable.  I made this exact mistake.