Why is TurboTax reporting I-Series Bond interest on my MN state return? As I understand it, Treasury I-Series Bond interest is exempt from state tax.

Forum|Forum|2 years ago
April 10, 2024
1 reply
0 views

I filled out all federal and state questions in TurboTax and got to the point of filing the return, but the MN Tax Due is still higher than it should be due to the I-Series bond interest. When I go back to the Federal Taxes tab, to Wages & Income, and edit the Interest on 1099-INT section, if I edit the amount for the Treasury Direct bond interest (box 3), I can see the MN Tax Due change.

It appears to be adding 1% of the bond interest in box 3 to my MN State taxes. How can I fix this?

TurboTax Online

mikemuskeAuthor

I saved my return as a PDF and confirmed the I-Series bond interest is listed on Schedule B (Form 1040) of my MN return under the Part I Interest section in box 1. There is no amount in box 3, which is "Excludable interest on series EE and I U.S. savings bonds issued after 1989." This appears to be a software bug. Is there a manual workaround?

VolvoGirl

Employee

Go back and confirm you entered the 1099INT with the amount in box 3 not box 1. Try deleting the 1099INT and enter it again manually. That usually clears something out and fixes it.

mikemuskeAuthor

Thank you for taking a look, unfortunately I verified the amount is in Box 3 already. I also tried deleting the 1099-INT entry just now and recreating it, but it had the same effect.

Upon deleting the entry my MN Tax Due decreased, and after I re-created it at put the interest in Box 3 (checking My form has info in more than just box 1), my MN Tax Due increased again. Just to be clear, I have no value in Box 1.