1099-DIV

[jp4tt]

2021 Desktop TurboTax adds the Ordinary Dividends & Exempt Dividends for entry on Dividends line in step-by-step 1099-DIV. 2020 Desktop TurboTax enters only the Ordinary Dividends. Why are Exempt Dividends being included in 2021?

[JillS56]

When you are entering the dividends on the screen where you enter Box 1a, Box 1b, and Box 2a under Box 1b is a box that you check that will show you the remaining boxes that are on a 1099-DIV.  

[jp4tt · Accepted solution]

Thanks for the reply.

Box 1b is checked for both tax years 2020 and 2021. So, I don't know why Exempt Dividends are added to Ordinary Dividends in 2021 but were not added in 2020. I haven't been able to find info in TurboTax (or the IRS) about whether Exempt Dividends should be included in "Dividends on 1099-DIV" under "Interest and Dividends" section in TurboTax Step-by-Step.

However, after looking at Schedule B (Form 1040) Interest and Dividends, line 5 shows only Ordinary Dividends and their total on line 6 which is what gets entered on line 3b of Form 1040. It appears that the Exempt Interest Dividends get reported on line 2a Tax-Exempt Interest on Form 1040.

So, even though TurboTax Step by Step shows Ordinary and Exempt Dividends as a total amount under the Interest and Dividends section, they get reported on separate lines on Form 1040.

[DianeW777]

Yes, that is correct.  They are dividends however the exempt interest dividends are reported differently and on a different section of the Form 1040 as you noted.  This is the correct way to handle these different types of dividends.  TurboTax has you covered.

[jp4tt]

Thanks very much for the confirmation, Diane!