Invesco PA Muni Specified Private Activity Bond Dividend Affecting Refund

[Trakker627]

I received a 1099 from Fidelity for a non-retirement account which is 100% invested in the Invesco PA Tax Free Muni Fund. When I imported the information into TT my refund decreased by several hundred dollars. There is an amount shown in the 1099-DIV Line 12 for Specified Private Activity Bond Dividends which is for AMT purposes, however I am not subject to AMT. Is this a bug? Otherwise why would tax free dividends affect my refund? 

Adding Line 12 from the 1099-DIV also increased the nominal amount I now owe PA by a few dollars which again to me makes no sense. 

[ThomasM125]

I entered what you described in TurboTax and I don't see the income being taxable. It is possible the income is affecting a credit as they can be sensitive to income, even if not taxable.

I suggest you look at your form 1040 before and after the entry to see what is changing and research further once you narrow it down to what is being affected.

You can view your form 1040 while working in the online version of TurboTax by following these steps:

While working on your return in the Federal section of TurboTax:

   1.  Choose the Tax Tools icon on your left menu bar

   2.  Tools

   3.  View Tax Summary

   4.  Choose the Preview my 1040 on your left menu bar

[Trakker627]

Thank you for the reply.

To clarify, I am using the Desk Top version, not the Online version. The website is defaulting to Online even though I select Desk Top.

Being retired, my tax return is normally pretty straight forward.

After importing the 1099 from Fidelity,  and seeing the change to my refund, I deleted the 1099 and entered the 1099 information manually. It was when I entered the figures into Line 12 of the 1099-DIV form that the refund changed.

Entering $x,xxx.00 into Line 11 made no  difference to my refund. Entering $xxx.00 into Line 12 triggered the decrease to the refund in the amount of $xxx.00 (5 times the amount in Line 12).

As far as I can tell, the amount from Line 12 is included in the total for Line 11. There is also a 1099-B that reports more detail of the Invesco transactions. I am concerned that TT may be double or triple counting (Line 11 + Line 12 + 1099-B) the amount from Line 12 even though Line 12 is for AMT calculation only.

Is it possible to open a Ticket so that the program code can be examined and tested?

[DaveF1006]

It depends on if you have an AMT situation this year because the amount of Box 12 in your 1099-DIV is a “tax preference” item added back to your taxable income to determine if you must pay the alternative minimum tax (AMT). Please look at IRS Instructions for 6251 for further information.

@Trakker627