1099-DIV: TurboTax is requiring me to select the state(s) where my exempt-interest dividends are from, but my form does not list a state. What do I do?

[baldietax]

the fund company will publish supplemental tax info for all their funds showing tax exempt %s by state, check their website they will have some sort of tax area.

[AnnetteB6]

You can choose the option 'multiple states' at the bottom of the dropdown box if:

• You live in a state where there is no state income tax.
• You live where exempt-interest dividends from other states aren't taxed.
• You have a small amount of tax-exempt dividends and you are not concerned about paying state tax on the amount.

Without the specific state information, your state tax return will include these exempt-interest dividends as income.

@aanunkor 

[Hal_Al · Accepted solution]

Q.  My form does not list a state. What do I do?

You get that state break down from your mutual fund company. If they did not provide a breakdown, you check the box “I earned tax exempt dividends in more than one state” ("Multiple States" in the  online program) on the first screen after entering the 1099-INT or 1099-DIV. Then select  "More than one state" at the bottom of the state  scroll down list.

If your mutual fund company provided you a breakdown*, you are only interested in your home state*. Multiply the % for your state by your total tax exempt dividends to get a $ amount (you can't enter the % in TurboTax [TT]). When asked which state, check the box "I earned tax exempt dividends in more than one state". In the drop down menu, select your state and enter the $ amount you calculated. In the 2nd box, select "More than one state*" (at the bottom of the scroll down list) and enter the remaining dollar amount.

If you don't want to mess with it, it is perfectly acceptable to assign the entire $$ amount to the single designation of "more than one state” / “Multiple States"

*Most mutual funds will provide a breakdown. But you usually have to ask for it, or find it on their web site.

**Your state will tax all the dividends except the dividends from municipal bonds  from your state and US Territories. In Illinois, only certain types of bonds are state tax-exempt.

If you can't find the breakdown (or you don't want to make the effort to look; it's no big deal. The percentage for any particular state is usually small.  Here's Fidelity's (for an example) https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/taxes/2023-tei-by-year.pdf