TurboTax is forcing me to choose either one state or multiple states as the source(s) of my exempt-interest income, but I don't know which states. What should I do?
just because you get exempt-interest dividends, doesn't mean those from your state are exempt from taxation. every state is different. my state exempts some but not all. you have to decide if its worth the hassle of finding out not only what portion of them come from your resident state but also what portion of those may be exempt from your state's taxation. personally, if the amount is small just use TX as the state - 100% of those dividends will then be subject to your state's taxation.
Most financial funds will have a tax center that will have a chart showing the percentage of exempt income for each state and/or the percentage of U.S. government interest. Or you can call your fund provider.
For example, 5% of your income may be exempt from both state and federal tax. If you don’t know or don’t want to be bothered calculating your exempt percentage, choose Multiple States, the last option in the drop down menu. That will make all your exempt-interest dividends taxable to your state.
just because you get exempt-interest dividends, doesn't mean those from your state are exempt from taxation. every state is different. my state exempts some but not all. you have to decide if its worth the hassle of finding out not only what portion of them come from your resident state but also what portion of those may be exempt from your state's taxation. personally, if the amount is small just use TX as the state - 100% of those dividends will then be subject to your state's taxation.
It appears that choosing multiple states requires you to specify the states and the percentage from each. Another member, along with my own financial advisor, recommended choosing one state and specifying one other than your own state. This is what I ended up doing. We'll see if it works.