Virginia Subtraction for Accrued Interest on Treasury Note

[chrisg0621]

Hello. I have Accrued Market Discount Interest on Treasury Notes held for over a year.  This is treated as taxable Interest for Federal tax purposes.  Virginia allows a Subtraction from AGI for government interest and dividends however TurboTax is not carrying the interest over to the Virginia Form 760 as a subtraction.  Help appreciated.

ChrisG0621

[VolvoGirl]

Did you enter it in box 3 on the 1099INT?  Not box 1.    You have to click the little box for my form has more boxes to get to box 3.  

[chrisg0621]

Thank you VolvoGirl. The accrued interest is reported on a 1099-B and therefore is entered in the Stock, Mutual Fund, Bond section of TurboTax, with the interest entered as an "adjustment". The gain is not shown as a long-term capital gain but instead is posted as ordinary interest on the 1040.  Thanks for your help. Chris

[chrisg0621]

As follow-up on my original question, I received an answer from TurboTax Support.  On the first page that loads in the State Return, titled "Here's the income that Virginia handles differently" there is a line item called "Other Subtractions from Federal Income" where the accrued interest can be entered.  Problem solved, and this issue is closed.