Capital Gains that come from U.S. obligations for Maryland

[DJF]

I am using TT Premier. I did not sell any stocks or mutual funds in 2022, so I didn't receive any 1099-Bs. I did receive 1099-DIVs from two mutual fund companies. When entering these in Federal section, I did follow the instructions to enter in the portion of box 1a that is dividends from US goverment interest, as the 1099-DIVs included this percentage, so I mult box 1a times this percentage and entered it in for each.

Now when I am in the MD state return, in the Income from US Obligations section, it does show the correct amount from what I entered for the dividends (box 1a) in the federal section. There is an EDIT button next to this, and it asks to enter any portion of your *capital gains* that came from US obligations. I checked my 1099-DIV and it doesn't mention percentage for capital gains distribution (box 2a of 1099-DIV).  The help mentions 1099-B or other brokerage statements, but I didn't receive a 1099B bc I didn't sell, and the I can't find any brokerage statement that mentions a separate percentage breakout for capital gains.  Where do I get this information? Should the box labeled Total From US Obligations then be left at 0? Does it even apply for someone who just received 1099-DIV, not any 1099-B?

I checked and see other posts where no one is able to get this information from their brokers so can you explain for what situation is this asked for, especially for the case where I have not put in any 1099B.

[MarilynG1]

If you didn't receive a 1099-B and your 1099-Div has no entry in Box 2a, then you are correct that no entry needs to made in your Maryland return for % of Capital Gains from US Obligations (or leave at $0).

When an investment makes a distribution of its earnings to you and reports it in box 2a of Form 1099-DIV, the IRS generally allows you to treat the distribution like a long-term capital gain. This is beneficial since the same tax rules that apply to your qualified dividends also apply to qualified capital gain distributions, regardless of whether you hold the investment for 10 days or 10 years.

Here's more info on Form 1099-Div.

@DJF 

[DJF]

Hello. My 1099-DIV does include an amount in box 2a, I should have made that explicit. However the brokerage (TRowe Price) only includes a statement (with description below) providing a "% of *dividends* from US Govt Securities", it does not provide a different percentage for *capital gains* or mention capital gains.  

The 1099-DIV describes "In most states, mutual fund dividends from interest on direct U.S. government securities are exempt from state and local taxes. To determine this amount for each of your funds, multiply the “% of dividends from U.S. government securities” (shown below) by the amount for that fund in Box 1a of your Form 1099-DIV."

So my question is should I use the same percentage and multiply the amount in box 2a and put that in the box Total From US Obligations? (Note that to the left of this box it does show Federal Total with the proper total of all Box 2a entries from the Federal 1099-DIV entries.)

Thank you also for the link.

[RobertB4444]

Yes, multiply that percentage by 2a as well.  It's the best answer that you have.

@DJF 

[Marval5]

The TT software took the amount entered for div income from U.S. obligations and duplicated that amount for capital gains from U.S. obligations.  This is a dangerous software error, that can be fixed manually. It should be obvious as the amount entered is doubled and placed on Line ab. of Form 502SU.  Easy to overlook and reflects poor quality control testing.

[Marval5]

Wrong.  One does not use the share of dividends from U.S. obligations to calculate capital gains from U.S. obligations.