Part of the TurboTax interview is a screen that asks the user to place a check mark if "A portion of dividends reported from a 1099-DIV is U.S. government interest," and there is a "Learn More" link next to this. Based on my 1099-DIV for a specific fund, there is about $200 in U.S. government interest, so I enter a check mark. On the next interview screen, it indicates that I should enter the amount of the dividends reported on the specific fund's 1099-DIV that represents interest from U.S. government obligations. However, based on the "Learn More" link information, TT says to "enter an adjustment for the amount of this that your state does not tax, and the TT State program will subtract this amount from your state income."
I don't understand this. Since the fund does NOT have 50% of its holdings in U.S. government obligations, it does not meet the California threshold, so should I enter $200 (which is what TT literally asks for on the screen) or "0" based on what "Learn More" indicates.
Unfortunately, this is a perfect example of how frustratingly unclear TT can be, and an area that begs for improvement.
if you don't want X dollars to be subtracted from your state income, don't enter X dollars.
That doesn't answer my question which is what is TurboTax asking for?
Correct...the Learn More is too brief...and doesn't cover all state situations.
So if you are a resident of CA, and the fund involved does not meet the CA minimum for US govt holdings....you don't enter those $$ at all (a Blank will probably work)
California, Connecticut, and New York all have minimum limits as to whether those $$ can be declared for Mutual Funds (Appears to be the same 50% minimum for each state)