I own several different municipal bond CEFs. Fidelity is the one broker that actually lists tax exempt percentages for me. Fidelity shows two columns on my document: tax exempt interest %, and US territory %. What is the US territory % - is this something needed in number entry or turbotax?
For figuring out the amount of tax exempt income, do I simply add up all the percentages listed on my statement (which comes to 48.33% in my case), then input 48.33% of the total amount for my home state income, and put the remainder in a second box under multiple states?
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normally you would go to the fund company to get their year-end supplement which has the %s by every state, but I do see Fidelity has that info for funds (handy!) and for one example I have at least, it ties back to the %s from the fund company. you can also do the same check against your funds' supplements.
according to the footnotes...
*Tax-Exempt Interest percentage provided is based on your legal State residency.
**US Territory percentage is the total per fund of all US Territorial interest earned in tax year 2025.
Most states (if not all? - not sure) include US territories (Puerto Rico etc) as exempt from state tax along with your home state. The only rub is TT doesn't have a bucket for that it has the individual territories but you could probably just enter it all as Puerto Rico, or get the actual breakdown from the fund company and enter for each territory. Puerto Rico can be a big portion of some funds' dividends as their yields are high.
In the supplemental questions you would need to select "I earned tax-exempt interest in more than one state." and then fill in your home state, and the US territories, and the rest you input as "Multiple States" so it adds back up to the total on the 1099. Check the outcome on your state return as an addition to income for what is taxable in your state, sometimes this entry screen can be buggy.
When you said you added up all the %s did you mean that literally... you need the average % i.e. you need to multiply the % for each fund by the exempt income distributed by that fund in Box 12 to get the $ amount exempt per fund and total those. You can then determine the average % exempt if you need that, or just enter the total $ amount by state/territory into TT. It's nice that Fidelity at least provides the %s but if you have multiple funds you'll still to do some math.
normally you would go to the fund company to get their year-end supplement which has the %s by every state, but I do see Fidelity has that info for funds (handy!) and for one example I have at least, it ties back to the %s from the fund company. you can also do the same check against your funds' supplements.
according to the footnotes...
*Tax-Exempt Interest percentage provided is based on your legal State residency.
**US Territory percentage is the total per fund of all US Territorial interest earned in tax year 2025.
Most states (if not all? - not sure) include US territories (Puerto Rico etc) as exempt from state tax along with your home state. The only rub is TT doesn't have a bucket for that it has the individual territories but you could probably just enter it all as Puerto Rico, or get the actual breakdown from the fund company and enter for each territory. Puerto Rico can be a big portion of some funds' dividends as their yields are high.
In the supplemental questions you would need to select "I earned tax-exempt interest in more than one state." and then fill in your home state, and the US territories, and the rest you input as "Multiple States" so it adds back up to the total on the 1099. Check the outcome on your state return as an addition to income for what is taxable in your state, sometimes this entry screen can be buggy.
When you said you added up all the %s did you mean that literally... you need the average % i.e. you need to multiply the % for each fund by the exempt income distributed by that fund in Box 12 to get the $ amount exempt per fund and total those. You can then determine the average % exempt if you need that, or just enter the total $ amount by state/territory into TT. It's nice that Fidelity at least provides the %s but if you have multiple funds you'll still to do some math.
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