1099-INT accrued interest paid does not affect NJ taxes due - why?

[jman3]

When I fill out a 1099-INT that shows interest received in box 1, I then say that I need to adjust that amount due to accrued interest paid. After I put in the accrued interest paid, I notice that my federal taxes decrease (which makes sense because it should lower the taxable interest earned). However, my New Jersey taxes do not change. Why is that the case?

From what I could tell by looking at the forms, when I enter the accrued interest paid, my federal 1040 line 2b goes down by that accrued amount paid, so that makes sense. But the NJ-1040 line 16a stays the same whether I enter accrued interest paid or not. It seems that the NJ portion does not recognize the adjustment to decrease the taxable interest?

Thanks for your help.

[KrisD15]

To clarify, what type of interest? Could it be interest that is not taxable to New Jersey in the first place?

[jman3]

It is from a corporate bond and should be taxable to NJ.

When I bought it, I paid accrued interest, so that's why I adjust the taxable amount. So if my 1099-INT box 1 were $100, but I paid $40 accrued interest, then the taxable amount should be $60. The federal 1040 line 2b shows it as $60, but the NJ-1040 does not seem to adjust it from the accrued amount paid.

[AmyC]

I tried to reproduce your issue. I entered the federal interest of $100 and selected the adjustment of $40. The federal and state are both correct.

This indicates the issue is on your side. A full or corrupted cache can cause problems in TurboTax, sometimes you need to clear your cache (that is, remove these temporary files).

For stuck information follow these steps:

Online version:

1. Delete the form 1099-INT causing trouble - see How to Delete  
2. Log out of your return and try one or more of the following:
   • Don't use Internet Explorer.
   • Clear cache and cookies,
   • Sign in using a different browser.
   • Sign in using a different device.
3. Log back into your return.
   • Enter the information again.

Desktop version: 

1. Delete the form 1099-INT
2. Save your return while closing the program.
3. Update the program
4. Open
5. Enter the information again.

[jman3]

@AmyC Thank you for your help. I noticed that my 1099-INT has an amount in box 1 and box 11. Apologies that I forgot to say that before.

Can you please recreate it as you did and also include something in box 11 as well in the same 1099-INT form? The federal form seems to handle the accrued interest okay, but it seems that also having an amount in box 11 prevents the NJ form from using the accrued interest amount to adjust the interest earned. 

I appreciate your help.

[AmyC · Accepted solution]

The best solution is to turn it into 2 separate entries. Delete box 11 and then just add a whole new form with just box 11. Great job!