What is box 11 Exempt interest dividends

[gmott18]

This is confusing. Is this box 11 amount the same as U.S. Government obligations?

2 pages later where it has the first box asking if a portion of these dividends are U.S. Government Interest, does this mean a portion of those exempt dividends in box 11?? So the exempt divs are the total amount for all states and then i figure out what part was for my state i guess and that is the amount i put in there?

Also, for one of my investments the inv co sent a form with the % of u.s. obligations by fund and some of those funds i own, but there was nothing in box 11 for exempt dividends on the 1099-Div.  Shouldnt there be an amount in box 11 if one of the funds i own has u.s. obligations?  maybe i need a tax accountant. this is giving me a headache.

[jtax · Accepted solution]

This can be confusing.

Box 11 has nothing to do with US Gvt interest. Box 11 is for state bonds whose interest is not taxable by the federal government. (And is usually not taxed by the state that issued the bond.)

Most funds will provide a supplementary statement showing the percentage of box 1 (ordinary dividends) that come from US Government obligations (e.g. t-notes, t-bonds). If you do the math and tell TT the amount, then TT will do the right thing so that your state will not tax that US Government dividends/interest.

[gmott18]

Thanks. Obviously, this is not my strength. So after i do that calculation, taking the Ordinary divs * (% of the fund's income from u.s. obligations), and do that for any fund i own that qualifies, and add that all up,  that is the number i enter.  Ok, after that , it asks which state is the exempt divs from so that is regarding the municipal bond stuff.  That is from many states. Ugh,  i have to do like 20 entries i guess.  Hats off to tax accountants. This stuff is time-consuming and not very efficient or clearly laid out.

[gmott18]

Hello, does anyone have an answer for this question? or is this unavailable on weekends?

[gmott18]

I think i figured this out , but it will be a pain entering all the states that the Tax exempt divs came from.

[Zbucklyo]

You are getting very confused here.  We are talking about two totally separate things.

First, tax-exempt dividends reported in Box 11 of a 1099-div are not taxed federally, but are taxable for states other than the issuing state.  If the interest is from a multi-state bond fund or ETF, the fund company will provide supplemental information showing the percentage breakdown of interest by state.

You would calculate the amount of interest from issuers in your resident state by multiplying that percentage by your total interest and reporting that with the two-digit code of your state.  The remainder is reported as 'More Than One State'.  Resident state interest won't be taxed by your resident state, but the other state interest will be.

Second, US government obligations are taxed by the federal government, but are not taxed by states. Again, the mutual fund or ETF will provide supplemental information about the percentage of interest or dividends that are US government obligations.  Multiply that percentage by your total amount received and enter that.  That will be excluded from state taxation.

[gmott18]

Great. Thanks. i think i have it now.  Appreciate the detail!

[Zbucklyo]

Yes.  Do not enter anything but your home state and more than one state.  You don't need to enter each state, as it won't change anything.

[jtax]

Sorry I didn't get back to you but I was busy and this is a volunteer forum. @Zbucklyo is right. For more info on how to enter the tax-exempt state info see this previous answer, which has some very helpful screenshots. If you need more help don't hesitate to ask again.

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[marlah]

appreciate your answer, but am not hearing where this information should be entered in ProSeries.