Tax Exempt interest is being added to income? Why

[AnnetteB · Accepted solution]

If you are seeing this on a summary screen during the process of completing your return, do not worry.  The summary screen could be simply re-capping the income (taxable and tax-exempt) that you received for the year.  It does not necessarily mean that the amount is included as taxable income on your return.  You should take a look at your Form 1040 to verify that it is not shown on line 8a, but is instead on line 8b. 

In order to preview your Form 1040, take the following steps:

• Click My Account at the top of your screen

• Click Tools

• On the Tools Center page, below “Other helpful links…”, click View Tax Summary

• Click Preview My 1040 shown at the top of your screen

• Use the Back choice at the top of the screen to return to your tax return

Note:  For 2019, check Form 1040 Line 2a for tax-exempt interest and Line 2b for taxable interest.

[edited 3/13/2020 | 2:41 pm PST]