2022 TurboTax - Colorado US Treasury Interest Question

[kkmrhktax]

Using up to date Turbo Tax. I have 2022 US Treasury bill interest and Federal Tax Exempt Interest/Dividend from MUB exchange traded fund. Based on 2021, brokerage 1099-DIV line 11 shows Exempt-Interest Dividend. I didn't have US Treasury bill interest in 2021 and I haven't received the 1099-INT from the Treasury. In 2022, TurboTax I enter MUB Exempt-interest dividend in box 12 of the 1099-DIV for the brokerage account. In 2022 TurboTax I enter the US Treasury interest in box 3 for 1099-INT. In the Colorado state form, the MUB amount is added to line 6 of Colorado Form 104. This is correct. The US Treasury interest is not showing in line 2 of form DR 0104AD. Why not?  When I select View -> Forms then for Colorado forms I select Interest Wks, US Government interest line 1 is the US Treasury interest and line 2 is the MUB number. This worksheet subtracts MUB number from US Treasury interest and for my case, this is a negative number so the total is 0. I thought US Treasury interest is not taxed in Colorado. Shouldn't the US Treasury interest number be subtracted from my state income since it is added to my federal income?

[AmyC]

I tried to replicate your situation. I entered the  1099-INT and DIV with information in the boxes you stated.  For Co, the 1099-INT is showing up on line 8 as a subtraction. The 1099-DIV is not showing up at all. 

The treasury interest is not taxed by any state.

CO begins with your federal income and must subtract the interest to get your CO taxable income.

Revisit your federal entries. Nothing is needed after entry in the federal section. No selection of anything uncommon is required.

[kkmrhktax]

Thank you. Since I haven't yet received the 1099-INT from the US Treasury, I wasn't sure what I should enter in TurboTax. I didn't enter the interest in box 1 of the Treasury 1099-INT, I only entered box 3. When I enter the same amount in box 1 and box 3, the CO form is populated.

[AmyC · Accepted solution]

Unless you have different interest for box 1, you don't want to enter box 3 interest again as it will double on your 1040, line 2b. Box 1 and box 3 add together for the federal return. The program worked correctly with box 1 blank on the 1099-INT.

[kkmrhktax]

You are correct. I removed the 1099-INT box 1 interest and the federal and CO state forms are correct. I don't understand what happened originally when I only had a number in box 3 of the 1099-INT and the CO form didn't show it. Thank you for your assistance.