PA state income deduction for Agency Bond (like Federal Home Loan Bank)

Forum|Forum|2 years ago
February 17, 2024
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All federal agency bond interests (Federal Farm Credit Bank, Federal Home Loan Bank) are not subject to state income tax.

Now the issue is: where/what is the appropriate ways to enter the data:

For Pennsylvania, I can go directly to "Interest Income Worksheet", there is a column called "Adjustment Amount", I can simply enter the total of Agency Bond payment, then, for the "Adjust Type", I use "M" - which says "State Use Only". This way, it successfully deduct the Agency Bond amount. However, I am not sure if "M" is the right choice since it says "State Use Only" -- does it mean it is reserved for PA State official use?

The other choice includes "H" - which means Other Adjustment. However, choosing "H" does not give me the full deduction of the agency bond payment (only gives me, like, 90%).

Please advise. Many thanks.

Best answer by AmyC

The M is for PA state only which is what you want. You can enter it in the program by selecting to Edit your Interest Income Summary. Select yes you want to adjust federal interest income and continue through. It is easier in Forms mode and the program allows it.

In other areas, be careful that you are not overriding fields as that will void the accuracy guarantee.

AmyCAnswer

Employee

In other areas, be careful that you are not overriding fields as that will void the accuracy guarantee.

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jinparkg

how about for VA, I don't see where I can edit interest income?

Where do I put income for agency bond in VA state tax return in turbotax?

asdfl76

This doesn’t seem to work for Massachusetts. Selecting Massachusetts labels the interest as MA bank interest, which is incorrect and limits the amount that isn’t taxable to $200.