Does Turbotax recognize ALL US government bond products as state-tax (CA) exempt?

Forum|Forum|1 year ago
March 23, 2025
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I imported my brokerage's 1099 composite into Turbotax. While Turbotax does appear to automatically subtract (from CA taxation) US Treasury interest (t-bills, notes, bonds) when copying federal info into CA 540, I don't think it's recognizing interest from certain ETFs and bonds as also state-tax exempt. Is anyone having similar issues and is there a manual adjustment fix? Or should I efile the return as is and manually amend it later?

Examples:

Schwab US treasury money fund SNSXX (99.99% holdings are government obligations)

ishares 20+ year treasury bond etf TLT (99.19%)

ishares 20+year treasury bond buywrite strategy etf TLTW (98.67%)

Federal Home Loan Banks US agency bond FHLB

All of these, as best to my knowledge, are either completely or almost all CA state-tax exempt.

AmyC

Employee

The program does handles US obligations and you are in charge of your state obligations. For box 1 dividends with a CA portion, you should enter in when asked. Follow these steps:

Open your return to federal income section
Locate the 1099-DIV with CA exempt income.
Edit
Go through the entry section
When it asks about exempt interest / dividends, enter CA and the amount

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baldietax

well I certainly wouldn't file yet if things are not settled it's much more work to fix later

did you input the US Gov $ amounts for your 1099-DIVs? even if the 1099 is imported I think you need need to go through and calculate and input this (interview question after you input/edit the 1099), most 1099s don't usually provide this information.

for FHLB did you hold this directly, check which box it was reported under, some brokers will report it as Box 3 which should flow to state returns as a subtraction, others may put it in Box 1 which will not.