Puerto rico bond interest is not treated correctly on the CA return. How should this be handled.

[TerryA]

Please elaborate - what is it that isn't correct?

[mmw90012]

Puerto Rico bond interest is not taxable in California and other states and turbo tax treats it as taxable

[MissM52]

This is not working for me. I have tax-exempt interest in two states: California and Puerto Rico. The CA State turbo tax is only treating the CA interest as tax-exempt, and I can't figure out how to modify it

[TerryA · Accepted solution]

That's right, PR bond interest is not taxable by the states. The TT/States won't include it in taxable if they know it's PR bond interest and that has to be entered in the 1099-INT federal screen.

Go back and edit that 1099-INT. The PR bond interest should only be in Box 8, not also in Box 1. Click through to Which state is your $$ of exempt interest from? Be sure you have selected Puerto Rico. That will keep it as tax exempt interest in the TT/States, including TT/Calif (I just tried it and it works fine).

[mw222]

Thank you TurboTaxTerry.  I deleted and reentered the entire 1099 and your solution worked.

[MissM52]

This is not working for me. I have tax-exempt interest in two states: California and Puerto Rico. The CA State turbo tax is only treating the CA interest as tax-exempt, and I can't figure out how to modify it

[anuragpgupta]

I have the same problem.  Maybe the way out is to enter it as two separate 1099-INT, one for CA and one for PR, and then TT/Calif would take care of it correctly (as the answer above seems to suggest). Would this work, and is this ok?