State taxable interest incorrectly reported as non-taxable interest

[user17746338250]

New Jersey interest income in boxes 16a and 16b is not being carried over correctly from my federal tax form.  The taxable income on my federal form box 2b is being combined with the tax-exempt amount in box 2a and reported on the New Jersey tax form line 16b as tax exempt and line 16a taxable interest is listed as zero.

[AmyC · Accepted solution]

Follow these steps to get the NJ interest income back into NJ:

1. Go to Federal > Wages & Income.
2. Locate  1099-INT and click Edit/Revisit 
3. On the screen where you entered the 1099-INT details, look for a checkbox that says "My form has info in other boxes (this is uncommon)"  verify entries are correct.
4. The next screen, "My state doesn't tax all of this interest." Uncheck that box. 
5. You will arrive at a screen titled "Do any of these uncommon situations apply?"
6. Look for a line that says "New Jersey nontaxable interest, taxable to federal."
7. Ensure this is unchecked or set to "None of these apply."
8. If you have multiple 1099-INTs, you need to verify each one.

If you do have some NJ interest income that is not taxable, carefully enter just that amount. It seems that all of the income ended up exempt rather than any actual NJ portion. If that is not the case and the numbers are still holding incorrectly, we have another issue. A full or corrupted cache can cause problems in TurboTax, sometimes you need to clear your cache (that is, remove these temporary files).

Online version:

1. Delete the form, see How to Delete  
2. Log out of your return and try one or more of the following:
   • Don't use Internet Explorer.
   • Clear cache and cookies,
   • Sign in using a different browser.
   • Sign in using a different device.
3. Log back into your return.
   • Enter the information again. 

Desktop version: 

1. Delete the form
2. Save your return while closing the program.
3. Update the program
4. Open
5. Enter the information again.

[RACNGBtax]

similar issue in MD, but slightly different. Not calculating the non-taxable interest from other states correctly. Considering it tax exempt in MD

[RogerD1]

If you had tax-exempt municipal bond interest, from mutual funds serving multiple states, check your entries by following these steps:

1. In the Income section, scroll down to Interest and Dividends and click Start or Update on the 1099-DIV section
2. Click on Edit for the 1099-DIV reporting the tax-exempt interest income
3. If you entries are all good on the Let's get the info from your 1099-DIV click Continue
4. Click Continue to get to the Tell us more about your exempt-interest dividends screen
5. If you earned interest from more than one state, check the circle for that
6. In the State dropdowns, select Maryland for the state and enter the exempt-interest earned from that state
7. In the next State dropdown, select Multiple states and enter the remaining exempt interest to equal the total interest from box 12 of the 1099-DIV
8. If you entered the 1099-DIV after you started the Maryland return, you should go back and delete the Maryland return and start it over again.
   1. If using the Desktop product, get to the Your State Returns page, then click File in the black banner at the top.  Select Remove State Return, then highlight the Maryland return, click Remove, then confirm that you want to delete it.
   2. If you are in the online version, click on State on the left side menu, then click the trashcan icon to the right of the Maryland return, then Yes to confirm deletion.  Click + Add another state to add Maryland back.
9. Prepare the Maryland return again.

Taking these steps should get the amount of tax-exempt interest that is taxable in Maryland to show up on line 2 of Maryland Form 502.