Treasury Bill interest

[Lexi7]

I have entered Treasury Bill interest on the Federal form 1040.   Our state (Kentucky) does not tax interest from the Treasury Bills.  However, the amount entered as interest on my federal form 1040 has transferred to my state return, counting as taxable income.  How can I navigate out of this system glitch.  

[VolvoGirl · Accepted solution]

You need to enter the interest in Box 3 on the 1099INT not box 1.  That makes it not taxable for state. You have to check the little box below that says…My form has info in more than just box 1.