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cool_kiwi
Level 2

State Bond Exempt Interest fails to Flow through to State Tax

So I have a case where INDIVIDUAL Bond Interest reported on a 1099-INT is failing to flow through to my state return. I have entered the state correctly in the income section when it asks which state the income is paid from. The box that asks if the state does not tax the interest does not contain my state and the "Special Handling" Help comment says to deal with it on the State tax side, selecting the check box but leaving the dropdown unchanged doesn't work.

 

The state tax side only pulls through tax exempt bond FUND income and not the INDIVIDUAL bond. I can see this issue in the Forms view as Turbotax fills out a state income additions and subtractions worksheet. The FUND income is showing but the INDIVIDUAL bond income is missing.

 

 

3 Replies
SteamTrain
Level 15

State Bond Exempt Interest fails to Flow through to State Tax

@cool_kiwi 

 

I recommend the following:

 

1)  IF the 1099-INT has more boxes with $$ in them, along with the box 8 $$ in it, remove any $$ from box 8 (& box 13 if appropriate) that came from your own state's bonds, and create a new 1099-INT with just those $$ in box 8, and tag them as coming from your own state's bonds on that separate 1099-INT.   IF a portion of those box 8 $$ came from other states, leave that portion in the original 1099-INT and tag it all as "Multiple States"  (or "More than one state" if you are using desktop software.)  ((((unless you live in Utah, then a couple other state's bond interest can be included with your own state)))).

 

2) could also try deleting that 1099-INT entirely, especially if it's data was imported originally.  Then create a new one and put in all the $$ manually.  (don't put in any 0.00 values in any boxes, leave them blank. )

 

3)  Not sure where you are seeing Special Handling, but if it's where I think you are checking a box, that refers to $$ in box 1, not box 8.....so yes, your state may not be a part of that checkbox.

 

4) The $$ tagged as being from your state's bonds should not show up on your state forms anywhere....just the $$ from other states should be a state income addition. 

*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
cool_kiwi
Level 2

State Bond Exempt Interest fails to Flow through to State Tax

Thanks for the ideas. I tried all of those and no change was detected. The state return still does not have the amount. It's not possible to override on the state income worksheet otherwise I would just do that. The 1099-INT information all looks correct..

SteamTrain
Level 15

State Bond Exempt Interest fails to Flow through to State Tax

@cool_kiwi 

 

OK, it's not clear to me exactly what is not showing up in your state form.

1)  Does none of box 8 $$ show up as additions to state income?

2) and how are you dealing with the box 8 $$? 

...2a)  are you tagging it all as "More than one state"

...2b)  or are you breaking down the box 8 $$ as some from your own state's bonds, and the remaining part as coming from "More than one state"  ?

3)  and what is the ~ total $ amount in box 8 you are tying to deal with ?

 

 

*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
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