Illinois Schedule M is used to report Other Additions/Subtractions. As you proceed through the Illinois State Interview in TurboTax, the schedule will be prepared in the background and included in your return, if needed.
You will come to a section in the Illinois interview, 'Here's the Income that Illinois Handles Differently' .
IL subtracts certain federal government interest on the state return and it shows on IL Schedule M, the form where IL additions and subtractions due to the state tax code varying from the federal tax code occur.
I am aware of the section "Here's the Income that Illinois Handles Differently" However there is not a category for interest that is tax exempt by states - only a category for Retirement income.
Perhaps there is a section in the Federal 1040 that would identify federal interest and EE Bonds and prompt the creation of a section in the state return - but I do not see anything.
I am able to force such a category by locating a Schedule M Form and manually entering the interest - need to override the line 22 amount in Schedule M in order to enter the total interest for EE Bonds and Treasury Bill interest.
However this seems very strange because all federal interest is exempt in all states. Do not know why Turbo tax does not explicitly handle the category. Perhaps I am missing something.
In TurboTax Online Premium, I reported the interest in box 3.
I am able to report Series EE bonds. See this screen.
In the Illinois state tax return, I came to this screen.
The interest is deducted on line 22 of Illinois Schedule M.
I need IL Schedule M to figure subtractions for IL 1040 Line 7. Specifically for for the Bright Start / Bright Directions college savings programs to which I have made contributions. The form exists.... I'm looking at it as I type. I got it from Tax.Illinois.gov site. How do I handle this without paper filing?? The $120.00 I pay for the Turbo Tax Advantage program is supposed to take care of all this. Please address this issue asap.
Thank you.
The form automatically populates when you enter the information in the program. Open your IL return and continue through to Here's the income that Illinois handles differently. Select Education and contributions.