US Govt Treasury Bills are not taxed by states. Where do I enter this on the Turbotax form?

Forum|Forum|6 years ago
February 19, 2020
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Deduction

SteamTrain

Employee

The interest from them are reported in box 3 of a 1099-INT form.

Once entered properly in box 3, of that form in the Federal section, the same $$ will not be used in the state tax return...either not included in the first place, or (more commonly ) removed is some subtraction line in the state form. How each state handles this depends on which state is involved.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

LLaurieAuthor

I'm sorry but I still don't understand. When you enter this Government Security under interest receipts on the Turbotax form where do you go to make sure that this interest is not tax (along with other non-Government interest receipts) by the state (in my case DC which does not tax Governt securities).

Thank you

SteamTrain

Employee

Every state (and DC) has their own way to handle them, on whatever lines they have on whatever forms they use...so i's all over the place.

...I don't know DC forms....maybe someone who knows DC will see this and suggest where they are on teh DC forms...or look yourself by going to the DC tax department page, save PDF copies of their 2019 tax forms and instructions, and search for the place they put them...usually a subtraction section.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*

KrisD15

When you enter the 1099-int in the Federal section, the coding tells the program to subtract it from the state return.

For DC it is on Schedule 1 Calculation B line 1 and flows to the D-40 line 13

For North Dakota It should show on line 6 of your ND return. It will not show in the taxable income amount in the TurboTax program,

@LLaurie

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KREC

Does anyone have experience with this for Maryland? Does turbotax automatically populate the 502SU (subtraction form) to reflect the treasury interest or do you have to manually input it?

VolvoGirl

Employee

Wait to get the 1099INT form. The amount should be in box 3 for savings bonds and treasury. Then Turbo Tax will know to subtract it from the state return. Yes it's automatic. If you are entering it yourself on the interest screen put it in box 3 not 1. You may have to click the little box that says I have more boxes.

mikelonisjax

I use TurboTax Hame and Business. I have some securities on the federal return that have amounts of U.S. governmental interest. A portion of that interest is not taxable in the State of Michigan. What entries do I make on the federal and state returns so that the Michigan portion of the U.S. governmental interest is not taxed on my Michigan return? Please help me.

KathrynG3

TurboTax will cover it. To flag this as US Governmental Interest, follow these steps:

From the Personal Tab, select Personal Income
Select I'll choose what I work on
Scroll down to Interest and Dividends>Interest on 1099-INT and select Start/Update
Here's the interest we have so far
- Either Add Interest income by clicking Add Interest income, or
- Edit your existing entry by clicking Edit
Let's get your 1099-INT or brokerage statement details
- Enter who you received the interest from and the box 1 amount
- Click the box by My form has info in more than just box 1 (this is uncommon)
- Fill in the rest of your form exactly as you received it and click Continue

This will automatically carry these details to your state return. To confirm this result, follow these steps:

Click the Forms icon in the upper right corner to toggle to Forms
Scroll down to Michigan Individual Schedule 1
Schedule 1, Line 10, which is a subtraction, should be populated with the income form U.S. government bonds and other U.S. obligations included in full from Adjusted Gross Income captured on MI-1040, Line 10.

TxQuery99

This US Govt income does not appear in the 1099 from my brokerage. Rather one calculates it from the document found on the brokerage website which provides the % of US Govt obligation interest by fund. These amounts are a deduction for MI but not Federal.

Where does Turbotax get the input for line 10 of MI Schedule 1?

sharongmel

Where do I enter the state ID for it to confirm it is not state taxable? I entered the 1099-INT box 3 and my state continues to show it as taxable. I am in PA