Michigan Schedule 1 Line 1

[AnnetteB6 · Accepted solution]

Based on the Michigan Instructions for Schedule 1, Line 1 is calculated as follows:  

Line 1: Residents enter nonbusiness gross interest, dividends, and income from obligations or securities of states and their political subdivisions other than Michigan.  Residents and nonresidents report non-Michigan municipal business income from a partnership, S corporation, estate, or trust with Michigan business activity. Business income subject to apportionment must be included on the
Michigan Schedule of Apportionment (MI-1040H). You may reduce this income by related expenses not allowed as a deduction by Section 265(a)(1) of the Internal Revenue Code (IRC).

For your particular case using information from your token file, here is the calculation for Line 1:

Total tax-exempt interest reported on Form 1099-INT, box 8:  31,775 (all states including MI)

Tax-exempt interest reported on Form 1099-INT, box 8 attributed to MI:  10,750  (33.832% of the total)

Tax-exempt interest reported on Form 1099-INT, box 8 attributed to states other than MI:  21,025  (66.168% of the total)

Total bond premium reported on Form 1099-INT, box 13:  14,580.52 

Bond premium attributed to states other than MI:  (14,580.52 X 0.66168) = 9647.64

Total tax-exempt OID reported on Form 1099-OID attributed to IN:  1459.47

Total exempt-interest dividends reported on Form 1099-DIV box 12:  8939.24

Exempt-interest dividends reported on Form 1099-DIV box 12 attributed to MI:  80.84

Exempt-interest dividends reported on Form 1099-DIV box 12 attributed to states other than MI:  8858.40

Total tax-exempt interest income reported on K-1 Trust, box 14 code A:  223

Total tax-exempt interest income reported on K-1 Trust, box 14 code A attributed to MI:  12

Total tax-exempt interest income reported on K-1 Trust, box 14 code A attributed to states other than MI:  211
 

Using the underlined values:

Line 1 = 21,025 + 1459.47 + 8858.40 + 211 - 9647.64 = 21,906.23 ... rounded to 21,906

@sgs112 

[sgs112]

Thank you for laying out the numbers.  So to summarize the formula used by TurboTax, the calculation for Michigan's Schedule 1 Line 1 is:

The addition of:

1.  Total tax-exempt interest reported on Form 1099-INT, box 8 less the portion attributed to MI that is self-calculated and reported in the Federal forms.  (make note of the percentage of the total attributed to MI to be later used in the adjustments)

2.  Total exempt-interest dividends reported on Form 1099-DIV box 12 less the portion attributed to MI that is self-calculated and reported in the Federal forms.  (make note of the percentage of the total attributed to MI to be later used in the adjustments)

3.  Total tax-exempt OID reported on Form 1099-OID less any portion attributed to MI interest  (make note of the percentage of the total attributed to MI to be later used in the adjustments)

4.  Total tax-exempt interest income reported on K-1 Trust, box 14 code A less the portion attributed to MI that is self-calculated and reported in the Federal forms.  (make note of the percentage of the total attributed to MI to be later used in the adjustments)

5.  Then Subtract any adjustments such as bond premiums listed on Line 13 of 1099-INT using the percentages calculated above.  

For example:  

Total bond premium reported on Form 1099-INT, box 13:  $xxx.00

Bond premium attributed to states other than MI:  ($xxx.00  X  %MI) = $xxx.00

Total 1+Total 2+Total 3+Total 4 minus Total 5= Michigan Schedule 1 Line 1

[DawnC]

Yes, all income taxable to Michigan gets included and all income not taxable by MI gets subtracted.   Some of that income is taxable to other states, and some is only taxable on the federal return.