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How do I get a Minnesota subtraction for income from U.S. Government bonds?

 
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3 Replies

How do I get a Minnesota subtraction for income from U.S. Government bonds?

This answer to my own question will help you too. I also want to give credit to a similar online answer (can't recall name) I had previously found.

Suggestion to TurboTax re state tax. When you click "Edit" on U.S. government securities, you cannot edit anything and there is no further help. A link to text below will help.

Follow these steps to deduct U.S. Government interest form your Illinois income. In the federal return, after you enter your 1099-DIV information, select Continue

  • The next screen will ask Tell us if any of these uncommon situations apply to you
  • Select A portion of these dividends is US Government Interest, select Continue
  • Select the appropriate option on the next screen, select Continue
  • Enter U.S. Government Interest in the box provided
  • TurboTax will carry this information over to your Illinois tax return

How do I get a Minnesota subtraction for income from U.S. Government bonds?

all true, but what if the Government Bond Interest came from a (taxable) Traditional IRA distribution?  This interview question does not come up on 1099R entries, only 1099 DIV?

DavidD66
Expert Alumni

How do I get a Minnesota subtraction for income from U.S. Government bonds?

The interest from a government bond that is held inside a Traditional IRA does not receive favorable tax treatment when it is distributed from the IRA.  It is taxed as a distribution from a retirement account, not as interest income.

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