Subtracting tax exempt dividends in VA state return

[schwartzr]

I have $1800 in tax exempt interest dividends from Vanguard mutual bond funds that I noted in my federal return. How do I subtract these exempt dividends from my state (VA) return?  It doesn't amount to much (about $40 based on the percentage charts that Vanguard provides)?  Do I enter $1760 in the Exempt U.S. Bond Income field or is there some other place I enter it?

[SteamTrain]

Read all of this, but part 2 is exactly your situation.  It is set in the Federal section, and then the info transfers to the state section.

State Tax Exempt Municipal Bond Interest

It's all dealt with in the Federal section on 1099-INT and 1099-DIV forms:

1) IF you hold a bunch of individual Bonds. Tax-exempt interest is usually reported on a 1099-INT form. US bond interest in box 3 and State/municipal bonds in box 8. Box 3 $$ are automatically excluded from State taxation, but are taxed on the Federal tax return.
On the pages that follow the main form, there is a place where you MUST indicate whether the municipal bond interest (box 8 ) came from "More than one state" ..Or... Only your resident state (rare.. unless you hold only individual bonds from your own state).......OR break it down to show bonds from your own state, the US Territories, and all else as "More than one state" (picture 1 below, for an NC resident). ( 1099-INT_TaxExempt_StateSelect_desktop.png)
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2) IF you held mutual funds with Municipal bond holdings, those are reported on a 1099-DIV form with all "non-municipal" dividends in boxes 1a, 1b, and tax-exempt municipals in box 11 (new box for 2018....for 2017 and a number of years earlier, it was box 10).

On the followup pages there, you again indicate the Municipal bond breakdown for box 11 came from "More than one state" ..Or... Only your resident state (rare... unless you hold a state specific mutual fund)......OR.. break it down to show bonds from your own state, the US territories, and all else as "More than one state". (looks similar to picture 1 below), but a few states (CA and MN.) do not allow a breakdown unless the Mutual fund you owned contained more than 50% of it's holdings for that state for CA, or 95% MN-bonds for MN residents. (...And IL doesn't allow a break-out at all for IL municipal bonds held in a Mutual Fund)
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extra:
3) For a 1099-DIV, if some of the $$ in box 1a came from US treasuries (and you want to have it not taxed by your state....then you have to calculate the actual $$ amount from the data the Mutual fund gives you at year-end. Then, on one of the pages that follows the main software form, you get a page (picture 2)(1099-DIV_Adj_USBond_1.png) where you check a box to indicate that some was US bond interest...and then the next page (picture 3)(1099-DIV_Adj_USBond_2.png) allows you to enter the $$ amount associated with that.

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