Why is the amount of Net tax-empent interest on my state return less than the amount of interest on my US treasuries?

Forum|Forum|11 months ago
April 13, 2025
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On the Interest Income Worksheet for my state return there is a section titled "Summary of Net Interest after Adjustments". Line 2 in that section is labeled "Net Arkansas tax-exempt interest and US obligations". The amount on that line is $741 less that the total amount of interest shown from US treasury obligations in the Interest Income worksheet. Does anyone know how this "Net tax-exempt interest is calculated"?

And it is NOT because on bond premium because I do not have any.

baldietax

any accrued interest adjustments?

leviton11Author

Yes. How does that affect things?

baldietax

same way the premium does, it reduces net interest income reported on your Fed return (under a single 'accrued interest' negative adjustment on your Schedule B) and the corresponding interest adjustments on your state return

beware also if you have 1099-INT with multiple types of income in boxes 1/3/8 and need to make an accrued interest adjustment on any of them, you have to split the 1099-INT up, as you can't specify which box it belongs to, and can only apply one accrued interest adjustment - TT will pro-rata it across all the income on the 1099.