Fidelity Government Money Market

[Songman53]

Fidelity identifies in the prospectus that 37% of the money fund symbol FDRXX is directly from US Government bonds. The rest is Agency bonds such as Fannie Mae, FHLB and Ginnie Mae etc. and these ARE taxable or the % of the income from these agency bonds in most states are taxable. The problem I have is that the turbo tax program imports the entire amount as 1099-DIV's and subjects the entire amount to federal tax and state tax. The entire amount is subject to Federal tax but the 37% that is direct government bonds such as treasuries is not subject to state tax in many states. But somehow even though turbo tax asked how much of the fund is direct government interest they still pulled in the entire amount into my Massachusetts return and the state taxed the entire amount. What did I not click properly, or do I have to override the system? Thanks, please help... 

[Songman53]

By the way I have turbo tax Premier

[AmyC]

Follow these steps:

1. Edit your 1099-DIV
2. After the income entry, continue
3. Uncommon Situations - select a portion are US Government interest
4. Enter the dollar value that represents that percentage.

Any amounts in box 12 should automatically pull over as nontaxable income.

If you have municipal or other exempt interest, you can enter state amounts on the next screen.

You can switch over to Forms mode and view the forms to be sure the income is no longer taxed.

[Songman53]

No tax-exempt interest municipal at all!  So, Ignore that field correct? Thanks for being so responsive!

[AmyC]

Yes and you are very welcome. Have a great night!