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State exempt US Agency bond interest

My 1099-INT form has included the US Agency bond interest which is state tax exempt.  It did break out the Treasury Bond interest but how can I indicate the Agency bond interest so I don't have to pay state tax on that interest?   Can I adjust the line item for "Interest on US Savings Bonds and Treasury Obligations" to include the Agency bond interest?

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2 Replies

State exempt US Agency bond interest

For Pennsylvania,  I can go directly to "Interest Income Worksheet", there is a column called "Adjustment Amount", I can simply enter the total of Agency Bond payment, then, for the "Adjust Type", I use "M" - which says "State Use Only".  This is the part I am not sure, The other choice includes "H" - which means Other Adjustment. However, choosing "H" does not give me the full deduction of the agency bond payment (only gives me, like, 90%).

 

Can someone help?

RobertB4444
Employee Tax Expert

State exempt US Agency bond interest

Use 'M'.  You are creating an entry for state use only.  That's the proper use of that code.

 

@GreenApple123 

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