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Level 1

How do I account for exempt dividends from municipal income not taxable in my state?

A portion of the exempt dividends from a number of funds investing in municipal income are not taxable in Massachusetts. How do I flag this income during the federal interview so that it is handled properly during the State interview?

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Employee Tax Expert

How do I account for exempt dividends from municipal income not taxable in my state?

In the Federal section, enter your 1099-Div.

  1. On the screen Let's get the details from your 1099-DIV or brokerage statement, check the box My form has info in more than just these boxes (this is uncommon). A drop-down will appear, and you can enter the amount of tax-exempt dividends in box 11.
  2. Continue to the screen Which state are your exempt interest-dividends from? If the entire amount isn't from MA, you can check the box I earned tax-exempt dividends in more than one state. 
  3. A drop-down will appear and you can add the details.

 

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3 Replies
Employee Tax Expert

How do I account for exempt dividends from municipal income not taxable in my state?

In the Federal section, enter your 1099-Div.

  1. On the screen Let's get the details from your 1099-DIV or brokerage statement, check the box My form has info in more than just these boxes (this is uncommon). A drop-down will appear, and you can enter the amount of tax-exempt dividends in box 11.
  2. Continue to the screen Which state are your exempt interest-dividends from? If the entire amount isn't from MA, you can check the box I earned tax-exempt dividends in more than one state. 
  3. A drop-down will appear and you can add the details.

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

New Member

How do I account for exempt dividends from municipal income not taxable in my state?

I have the same issue but I Imported the 1099-R infor and the dropdown boxes you mention do not appear.  Why and what can I do? Box 11 is correctly filled in but I do not have any dropdown box to tell TurboTax which states the dividends came from nor the $ amounts.

Level 1

How do I account for exempt dividends from municipal income not taxable in my state?

One of the things I found was that I needed to fill in the drop down boxes with

(1) the amount not taxable in MA and

(2) the remainder amount of Exempt Dividends

For the first entry I picked Massachusetts. For the second entry (the remainder amount) I scrolled to the bottom of the "State" pick list and selected something like "multiple states"

TurboTax won't total the amounts column for you, but they must add up to the amount shown at the top of the page. If they don't, after you hit continue, the program will suggest that you revisit the page, which you can do by selecting "Back."