Question

Mass. tax return: TT amount as bond premium on tax exempt interest doesn't tie to 1099. TT doesn't ask for the this info, only imports total. Where does TT get info?

Forum|Forum|6 years ago
March 30, 2020
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TurboTax Online

It is usually in Box 3 of 1099INT although sometimes it is in the details or statements attached to the 1099INT or the 1099B. If you imported the data, and it is not present, then you should download a PDF or other manual copy so that you can add that detail. If the detail is present, it was likely in the supplemental data transmitted during the import.

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P

pwerth00

My Bond Premium is listed on the 1099 and seems to be taken into account for the Federal return. However since most of the bonds are tax free bonds which I have to pay Massachusetts taxes on this does not make a big difference for the federal taxes but that interest is taxed at 5% by the state. The bond premium does not seem to be making its way to reduce by interest on the state return. How can I make this happen?

ReneeM7122

You are correct, interest income on municipal bonds are not taxable to the IRS, and not taxable to the state as long as the bond is from your home state. If you do need to pay 5% and it isn't carrying over to your state return from the 1099, please follow these steps:

Click on Federal > Wages & Income.
Scroll down to the Interest and Dividends section and click on the Start/Revisit box next to Interest on 1099-INT.
Answer Yes to Did you receive any interest income?
On the next screen, click on I'll type it in myself.
On the next screen, Let's get your 1099-INT or brokerage statement details, mark the box My form has info in more than just box 1 (this is uncommon).
Enter tax-exempt interest in Box 8.