I have municipal bonds from both my state of residence and other states held in a brokerage account . The interest on the resident state bond is excluded in my state taxable income, but the interest from the other states is included as taxable income. Because 1099-INT Line 13 (Bond Premium on Tax-Exempt Bond) is imported from as a single number, and Turbotax interview doesn't ask for the allocation by state, Turbotax uses a shortcut to estimate the state allocation of Line 13 in the same proportion as 1099-INT Line 8 (Tax-Exempt Interest) that is reported by state in the interview. The interview should ask for the allocation of Line 13 by state. The amounts in Line 13 affect the taxable interest on the municipal bonds. I have to manually override the figure in the Forms view to get the correct reported interest on out-of-state bonds.
TURBOTAX, can you please fix this for 2024?
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As an easier workaround, You could always take out those box 8 & 13 $$, just for the state(s) involved....and report them on a separate 1099-INT. i.e, you home state on one form, and all the other states on a separate 1099-INT...with box 13 reported on whichever of the two it's needed.
I Commonly do this anyhow for Muni bonds I purchase during the year, where I pay accrued interest to the seller, since a 1099-INT with box 1, 3 & 8 $$ on it, the accrued interest deduction will be applied wrongly if you don't move box 8 & 13 into its own 1099-INT form.
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