1099 DIV BOX 12 exempt interest dividend for determining state exemption

[FGYYDS]

Hi everyone,

I have been researching about inputing the exempt-interest dividends state distribution on Turbotax desktop.  I live in CA. I had $584.22 on 1099-DIV BOX12 and $74.88 on BOX13.

I am confused about inputing the page below,

For example all $584.22 is from one bond, supplement document below:

Shall I do math $584.22 x 5.74% = $33.53 ? Then entering $33.53 into Exempt-interest dividend amount for CA? Entering $550.69 for "Multiple states"?

But I saw on other post that California doesn't allow me to break out the CA dividend unless the bond fund contains at least 50% of it's assets in CA or US Bonds. For my above chart, CA is less than 50%.

Link: https://www.ftb.ca.gov/forms/2024/2024-540-ca-instructions.html#:~:text=Certain%20mutual%20funds,FTB....

So what should I input for that page? Thank you for your answer.

[FGYYDS]

Could an tax expert answer my question? Thanks.

[DawnC]

Enter the full amount on one line/from one state, as multiple states.   

The dividends/interest reported here won't be taxed on your federal return.   However, most states tax dividends/interest paid by another state.

[ccarbon]

I have an amount in Box 12 on the 1099-DIV and part of that is not taxable in my State.  I have checked the box which says I have earned exempt income in more than one state, and then broke out the state portion that is exempt in my state and putting the rest in Multiple states.  However the entire amount is flowing to my state return as exempt.  This is not correct.  I only want the exempt portion for my state to flow here.  Please advise

[RobertB4444]

You may have to overwrite the amount to get the correct amount to flow through to your state.  When you go through the walkthrough it should ask you about the exempt dividends.  You can enter the taxable amount manually at that point.

@ccarbon 

[ccarbon]

As of now, I have overridden the number on the Form so it is the correct amount.  However during the review for errors, it came up with a notice that a number was overridden.  I didn't know if this would be a problem when e-filing.  Just not sure why it is not flowing properly.  I am doing the same exact steps I did last year as far as checking 'more than one state 'and then breaking out the amount for the dividends for my state and the remainder for multiple states.

[RobertB4444]

It isn't a problem for e-filing but overriding a number does invalidate the TurboTax 'accuracy guarantee'.  As long as you are sure of the numbers and sure that they are entered correctly that shouldn't be a problem but it's worth a triple-check.

@ccarbon 

[ccarbon]

Thanks for your help.  Do you know why turbo tax is working differently than last year?   I followed the exact same steps and the exempt numbers flowed correctly to the state return last year but not this year.

[baldietax]

if you haven't tried it may be worth just inputting a fresh 1099-DIV to see if you can get it flow cleanly to state, without having to override things. in case something got messed up.

[baldietax]

it could be this issue, not sure how this condition occurs but I've also seen it happen in forms mode.

https://ttlc.intuit.com/community/taxes/discussion/the-portion-of-tax-exempt-dividends-that-are-taxa...

[ccarbon]

That worked!  Thanks so much.