Turbo tax

Forum|Forum|3 years ago
March 8, 2023
1 reply
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Turbotax should have automatically transferred federally exempt dividends to state form, but it didnt. My state would charge tax on that, but if turbotax didn't pick it up - would I be safe omitting it on state tax form? (Hypothetically speaking)

Hal_Al

Employee

No. The IRS shares info, from line 2a of from 1040, with the states.

The most likely reason it didn't transfer is because you mistakenly identified the interest as being from your state.

After entring your 1099-INT and/or 1099-DIV, When asked which state, check the box "I earned tax exempt dividends in more than one state". In the drop down menu, select your state and enter the $ amount you calculated. In the 2nd box, select "More than one state*" (at the bottom of the scroll down list) and enter the remaining dollar amount.

If your mutual fund company provided you a breakdown*, you are only interested in your home state*. Multiply the % for your state by your total tax exempt dividends to get a $ amount (you can't enter the % in TurboTax [TT]).

*Most mutual funds will provide a breakdown. But you usually have to ask for it, or find it on their web site.

**Your state will tax all the dividends except the dividends from municipal bonds from your state and US Territories.