The interest from them are reported in box 3 of a 1099-INT form.
Once entered properly in box 3, of that form in the Federal section, the same $$ will not be used in the state tax return...either not included in the first place, or (more commonly ) removed is some subtraction line in the state form. How each state handles this depends on which state is involved.
I'm sorry but I still don't understand. When you enter this Government Security under interest receipts on the Turbotax form where do you go to make sure that this interest is not tax (along with other non-Government interest receipts) by the state (in my case DC which does not tax Governt securities).
Thank you
Every state (and DC) has their own way to handle them, on whatever lines they have on whatever forms they use...so i's all over the place.
...I don't know DC forms....maybe someone who knows DC will see this and suggest where they are on teh DC forms...or look yourself by going to the DC tax department page, save PDF copies of their 2019 tax forms and instructions, and search for the place they put them...usually a subtraction section.
I am having the same issue. US Govt interest is not being forwarded to the state return (ND in this case). I entered the info but the ND return seems to be "ignoring" the info.
When you enter the 1099-int in the Federal section, the coding tells the program to subtract it from the state return.
For DC it is on Schedule 1 Calculation B line 1 and flows to the D-40 line 13
For North Dakota It should show on line 6 of your ND return. It will not show in the taxable income amount in the TurboTax program,
I use TurboTax Hame and Business. I have some securities on the federal return that have amounts of U.S. governmental interest. A portion of that interest is not taxable in the State of Michigan. What entries do I make on the federal and state returns so that the Michigan portion of the U.S. governmental interest is not taxed on my Michigan return? Please help me.
TurboTax will cover it. To flag this as US Governmental Interest, follow these steps:
This will automatically carry these details to your state return. To confirm this result, follow these steps:
Were you able to resolve where to enter this info? As it does not appear on my brokerage 1099 there is no box for entry. (It is calculated from a document provided by my brokerage with % of US Government items by mutual fund.)
This US Govt income does not appear in the 1099 from my brokerage. Rather one calculates it from the document found on the brokerage website which provides the % of US Govt obligation interest by fund. These amounts are a deduction for MI but not Federal.
Where does Turbotax get the input for line 10 of MI Schedule 1?
The US govt interest to be deducted should be coming from the total of
1) box 3 $$ on 1099-INT forms
and
2) the US Govt interest you indicated as a sub-part of box 1a $$ on 1099-DIV forms.
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For #2, you EDIT the 1099-DIV form, and enter all the $$$ that are actually on your real 1099-DIV.
............THEN..you Continue to the next page and there is a checkbox to select:
"A portion of these dividends is U.S. Government interest."
......THEN..you continue to the next page you get to enter what sub-part of box 1a represents $$ received as US Govt Interest....and those $$ should then added in with #1 to go into line 10 of the MI schedule 1.
...BUT...you have to calculate the proper amounts yourself, since the value in box 1a and a 1099-DIV can be a mix of stock dividends, Mutual Fund short term gains, and other mixed Corporate/US Govt bond dividends.
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I suspect there may also be some US Govt $$ that can come in on a form K-1...but I have no experience with that particular form
Hi Kathryn,
On schedule ADJ/CG of the Virginia state tax return the amount in line 1 under additions, which is interest on obligations of other state, does not tie to the non-Virginia tax exempt interest amount that I entered in Box 8 of Form 1099-DIV. I think the amount that is being added to my Virginia State income is too high based on my calculations. However, TurboTax does not permit me to amend the amount on schedule ADJ/CG of the Virginia Form. How is this add back to state income amount calculated by TurboTax? Does TurboTax deduct a portion of the bond premium expense to calculate the amount to add back to Virginia State income?
Thank you,
Judy
No, TurboTax doesn't actually deduct a portion of the bond premium expense to calculate an amount to add back to Virginia State income. To get the bond to show as nontaxable by the state, entering the tax exempt interest in Box 8 of the 1099-INT will confirm the payer's EIN, which will carry over until you can enter the sate from which the municipal bond came. The state has to be the sate you live in for it to be non-taxable.
Where do I enter the state ID for it to confirm it is not state taxable? I entered the 1099-INT box 3 and my state continues to show it as taxable. I am in PA
You don't need to enter a state ID for the box 3 $$ on a 1099-INT. No state taxes those $$.
Nor will PA end up taxing those box 3 $$...IF...if the TTX PA software is working right.
Unlikely that the tax software wouldn't get that right at this late stage...but stranger things have happened.
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Does anyone have experience with this for Maryland? Does turbotax automatically populate the 502SU (subtraction form) to reflect the treasury interest or do you have to manually input it?
Wait to get the 1099INT form. The amount should be in box 3 for savings bonds and treasury. Then Turbo Tax will know to subtract it from the state return. Yes it's automatic. If you are entering it yourself on the interest screen put it in box 3 not 1. You may have to click the little box that says I have more boxes.
Thanks. I import my 1099 from brokerage into TT so it’ll populate if anything appears in box3. I think most of the treasury obligations are not maturing so assume that the interest they gain in the interim, is not taxable until maturity? if it is, the number would appear in box 3?
Right not taxable until they mature or you cash them in. But you can report the interest each year so you don't have a big interest when you cash them.
See IRS Publication 550 starting on page 7 for Savings Bond Interest
https://www.irs.gov/pub/irs-pdf/p550.pdf
Reporting options for cash method taxpayers. If you use the cash method of reporting income, you can report the interest on series EE, series E, and series I bonds in either of the following ways.
Method 1. Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year in which they mature. (However, see Savings bonds traded , later.)
Note. Series E bonds issued in 1980 matured in 2010. If you have used method 1, you generally must report the interest on these bonds on your 2010 return.
Method 2. Choose to report the increase in redemption value as interest each year.
You must use the same method for all series EE, series E, and series I bonds you own. If you do not choose method 2 by reporting the increase in redemption value as interest each year, you must use method 1.
Amounts entered into box 3 of TurboTax's 1099-INT form are automatically transferred to your tax income tax return for subtraction from your federal AGI. Yes, TurboTax automatically transfers that to Schedule SU line ab of your Maryland tax return.
I have a 1099 INT.
box 1 shows 3xxx
box 3 shows 2xxx
box 11 shows 3x.xx
box 12 shows 9.xx
Then in the section below the broker states “the following amounts are not reported to IRS . They are presented for your reference in preparing your return.
then it lists:
taxable accrued interest paid 1xxx.xx
Do I include the taxable accrued interest paid on the return? If so where and how? If I import my 1099s from my broker will it be imported? Thanks.
No, the accrued interest will not be imported.
Yes, you should report it since it reduces your taxable income.
BUT
You will need to create two 1099-INT forms
......one with the box 1 and 11 $$, and a second one with the box 3 and 12 $$.
The accrued interest you paid when you bought the bonds, needs to be reported just on the particular 1099-INT for which you received interest.
For example: if you paid accrued interest on buying a US Treasury bond, then that gets reported on the 1099-INT which had the box 3 $$ on it.
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Where is it reported? When you enter the 1099-INT,
On a page AFTER the main form page there is a page with some checkboxes
...you check the box indicating you need to adjust the interest reported.
...........then a page or two later, you will get a box to enter the accrued interest you paid to buy the bond(s) (see below):
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(Picture from desktop software...but Online Q&A looks similar)
the amount showing up on line ab on Maryland 502SU is different than what I have in box 3 of the 1099 INT.
example: 1099 INT
box 3 $2944
box 11 $35.12
box 12 $9.24
Maryland line ab has $2935?
box