US Agency Bonds - Minnesota

[bcly]

Minnesota exempts bond interest on US Agency bonds.  The exemption seems similar to other states where TT enables a dropdown box to select the state and "choose type of special state handling".  No such option in TT for Minnesota holders of US Agency Bonds that I can find.   Last year I was able to manually override cells in the state TT portion keeping the correct amount in the federal TT box 1 Interest Income.  Two questions.  One: how can I reflect a Minnesota exemption for US Agency Bond interest - what steps do I take for this years' filing? and Two:  it seems people from a variety of states keep running into the same issue with state US Agency Bond interest exemptions - why can't all these states be listed in the dropdown list rather than going to the state filing and struggling with solves if they even exist?....or giving up and paying excess tax on a state tax exemption?  Thanks.

[baldietax]

just to clarify which agency bonds are you referring to as not all are generally state exempt in particular Freddie, Fannie and GNMA are usually not but I'm not familiar with MN taxes.  I had FHLBs at Vanguard reported in Box 3, so I'm also curious what brokerage you are using.

One option is to modify or input a separate 1099-INT reflecting this interest in Box 3 instead of Box 1.  I'm not a CPA/Expert so I don't know any IRS implications of this but I would imagine 1099 reporting errors between Box 1/3 happen and don't affect Fed taxes.

Another option is usually the state tax program has ability to put in manual/miscellaneous additions and subtractions that folks have been using to subtract Accrued Market Discount on Treasuries reported on 1099-Bs if they believe that to be state exempt, tho some folks have reported that precludes e-filing.

[baldietax]

similar topic

https://ttlc.intuit.com/community/state-taxes/discussion/e-file-minnesota-with-overrides-for-us-trea...