Agency bonds for state exemptoni

[jinparkg]

has anyone figured out how to enter deduction for agency bonds in states other than PA?

[SteamTrain]

Depends on what state you are using...and you haven't said what state you are a resident of.

For NC, it requires the Desktop software, and entering the US Agency $$ value in Forms Mode on one of the NC worksheets.

[jinparkg]

For Virginia, do you know how to input?  I have FHLB bonds and can't figure out how to input because it should not be taxed at state level.

[SteamTrain]

OK   @DJS ..............I think you work with the VA forms.

DO you know if the VA Q&A section has an area to "adjust" (reduce) the VA taxable income for $$ received from US Agencies?

Many states allow taxpayers to exclude dividends/inters from US Agencies (TVA, FHLB etc) that show up as income in box 1 (not box 3) of the 1099-INT form.   In order to remove it, some state's software has an area to "Adjust" the state income by entering that US Agency bond interest...... Does the VA software have a usable area in their Q&A?

[DJS]

I believe that this is automatically taken into account when you complete the federal return. Look at VA Schedule ADJ/CG, Subtractions, Line 4, Income (US Obligations/securities). 

[SteamTrain]

@DJS 

Not referring to US Treasury Bonds/Notes or Savings bonds that are in box 3 of a 1099-INT.....But, US "Agency" $$ , like TVA Bonds, show up in box 1 of the 1099-INT, and there is no way in the Federal section to indicate what part of box 1 $$ are from one of those separate US Agencies.

The software does have a way to indicate any US Govt interest that is part of box 1a of a 1099-DIV form...and any box 3 of the 1099-INT....those $$ are transferred automatically to the appropriate spot in the state forms.

[jinparkg]

US gov't obligations are not the same as FHLB agency bonds.  Turbotax does adjust for US gov't obligations in the prompts and automatically flows to the state.  However, there is no where to put in for agency bonds for Virginia.  Please advise.

[AmyC]

An agency bond is a debt issued by a government sponsored entity  (GSE) or a federal agency. A GSE is not guaranteed by the government and not deductible in VA whereas a federal agency is backed by the government and is deductible.

If you have deductible interest, you can enter it in exempt US bond income

Reference:

94-281 | Virginia Tax

[TBTX1]

Hello, I want to make sure that my understanding is correct. 

So for 1099DIV that is from US securities income, if I put that amount in the Federal, it automatically flows to VA State. 

The screenshot above is for other US securities/bond that I was not able to flag/type in Federal. Correct? Thank you. 

[AmyC]

Yes, if you mark the box after entering the 1099-DIV that it contains US government interest and enter the portion. My picture above is from the VA section of the program. You can enter income from US obligations in VA. 

For a 1099-DIV, enter it in the federal program right after entering the information from the 1099-DIV. You can edit your 1099-DIV and go through it to get to the uncommon situations screen and enter your US government interest from box 1. @TBTX1