Entering Tax Exempt Interest in Turbotax Deluxe

Forum|Forum|1 year ago
March 31, 2025
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I am a taxpayer in Oregon using Turbotax Deluxe, and I own mutual funds that generate some of their income from US Government securities. It is my understanding that income from US government securities is not subject to Oregon state tax.

I received supplemental information from the funds which allows me to calculate the income from government securities for each fund, and I have done that, however I cannot find where to enter the resulting information in Tubotax. Where do I enter this income? I have gone through the income sections of both the federal and state dialogs, but I cannot find a place to enter this information. Assistance will be appreciated-Thank you!

creswela

Best answer by baldietax

actually ignore my comments about Forms, it's better to input it in EasyStep rather than Forms. When you do it in Forms there is a checkbox which doesn't get set up and the 1099 will end up needing review and go thru the interview process anyway to fix it.

baldietax

find the 1099-DIV which reported this income, when you edit that 1099-DIV and select 'continue' on the screen with the amounts/boxes you should get some interview questions whether some of this was US Government Interest and then get a supplemental box to enter the $ amount.

If you on desktop a quicker way is to go to Forms mode, select the 1099-DIV worksheet underneath Schedule B and there will be a place to input it right at the top under Box 1a.

baldietaxAnswer

creswelaAuthor

Employee

Thank you baldietax, I clicked through the Easystep button for my 1099-DIV, and arrived at Box 12 - Exempt Interest Dividends; entered my data there, and it went through and lowered my state tax liability, so now good to go - many thanks!.

AmyC

Employee

Your 1099-INT box 3 shows interest on US Savings Bonds, Treasury bills, bonds, notes. Interest on US Obligations is not taxable at the state level but is taxable on your federal. This income is not included in box 1.

Your 1099-DIV

box 1a shows ordinary dividends. This income is taxable to the federal but may not all be taxable to the state. Your supplemental pages will show if you have US Obligations in box 1. In that case:

on the next screen uncommon situation
select a portion is US Government interest.
Continue.
Then enter the interest.

box 12 shows exempt interest from dividends or other Regulated Investment Company (RIC). This income is not taxable to the federal and may not be taxable to your state.

There should be a guide showing the percentage from your state. If a portion isn't taxable to your state, enter the income for your state. If you lived in more than one state, continue adding states. The last option is multiple states for the rest of the income.

You should not be changing your 1099-INT and 1099-DIV form entry but you should be allocating the amounts in the program.