TN Hall Tax: Do I owe TN taxes on dividends?

[arijitmits]

I am a TN resident, filing taxes under the "Married - Joint filing" option and my yearly dividends is less than $2500. However, turbo tax "Premier" is showing me that I owe $1 tax for TN state.

Is that incorrect calculation, as I read that the threshold for 2020 TN hall tax was $2500 under married joint filing option.

Some guidance will be highly appreciated.

[ErnieS0]

The exemption amount is $2,500 for the Hall Tax for married filing joint. Capital gains distributions are also taxable. Do you have any?

[SweetieJean]

@ErnieS0  I thought it was just on interest from bonds and notes, and dividends from stock.  Do you have a cite for it applying it to capital gains?

[ErnieS0]

@SweettisJean 2020 Guidance for Tennessee’s Hall Income Tax Return:

Income from investment trusts and mutual funds, including capital gain distributions and distributions designated as “nontaxable” under federal income tax law, whether in cash or additional stock, is taxable. The portion of income derived from bonds of the U.S. government and its agencies or bonds of the state of Tennessee and its counties and municipalities are exempt. 

[arijitmits]

@ErnieS0 @SweetieJean  - As per the cited document for TN Hall tax the following is taxable if filing taxes under married joint filing.

- Interest & Dividend Income > $2500

- Capital gains from mutual funds/Investment trusts [Section Taxable income pt(2)

Note: Capital gains from sale of stock or real estate is non-taxable [Section Nontaxable income pt(11)]

My total interest & Dividend income is less than $2500 and all of my capital gains are from sale of equity stocks.

[ErnieS0]

@arijitmits Someone would have to look at your TurboTax to figure out what's going on. When I enter $2,500 into TurboTax it shows no tax due.

See What is the TurboTax phone number?