Tax exempt interest - 1099 Div

[mswin]

Why is my tax exempt interest that I filled out in the federal tax section using 1099 -DIV being added as taxable income on my state tax form?

[DawnC]

Did you adjust it on the state return?   What state?   There is an income screen on the state return where you can enter additions or subtractions to the income that transferred from the federal return.  

[mswin]

It is Minnesota.  I didn't see a place to adjust the state return.  It just walked me through a few questions and said done.  Do I need to open the form?  And how would you do that for State and not affect Federa?  Really new to turbotax and not sure how to use the program. 

[mswin]

I think I found the place to adjust income.  It says I entered $230 on the federal.   Then it says - Enter portion where less than 95% of the dividends comes from bonds issued in MN.  The total I entered in Federal was $230 MN and $11 in other states.  Do I put Zero or the $11 in the box?

[DianeW777]

In the federal interview if you do not select your state (TurboTax is looking for where this interest might be exempt because of what state the bond is derived from).

If you have a percentage of earnings from each state (usually provided by your broker), you can make the necessary entries, one for your state and one for all others. 

1. If you select that you need to adjust these dividends, on the Do these uncommon situations apply? , 
2. then continue to the screen 'Tell us about your dividend adjustment' Enter the amount full amount. 
3. Continue to 'Tell us more about your exempt-interest dividends' Select your state from the dropdown to enter the $11
4. Select Multiple States from the second drop down (at the bottom of the list) to enter the remainder.

@mswin