potential state tax exclusions from municipal and us territory obligations for Box 12 on 1099div

Forum|Forum|1 year ago
March 26, 2025
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I'm trying to figure out what amount I need to enter for TT question asking me about where my tax exempt income came from. My consolidated 1099 from Edward Jones has a chart that has headers of the bond fund, income, South Carolina Obligations (% of income and exclusion amount), and US territories (% of Income and Exclusion Amount). Then it totals the figures: 1. Total State Income Municipal and US Territory Obligations held indirectly, 2. Total income from municipal bond obligations issued in your state and owned by you directly, and 3. Total Potential State Tax exclusion from Municipal and US Territory Obligations. My question is which amount from the 3 "Total" choices do I enter for my state? Would I then choose "multiple states" for the remainder of the amount?

AmyC

Employee

1. Your 1099-DIV box 12 has federal obligations that are automatically state exempt. Your 1099-INT box 3 is the same. You are not making a choice for box 12. You have box 1 dividends, that contain your state and municipal obligations. Option 2 would limit the SC amounts so the other amounts are taxable in SC.

SC begins with the federal return. It has an addback for state and local obligations outside of SC that were exempt on the federal. (The federal does not tax state obligations). SC does not have any requirements for holding percentages like some other states.

2. You do want to enter multiple states for the rest of the income (from other state and local obligations) along with your SC income.

Note: I can't see your 1099-B to know if box 1 contains other items pertinent to this answer. Carefully review your 1099-B.

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mootzie55Author

So... I'm still confused on what to enter. Under the heading South Carolina Obligations, the % of income is 0.088378%. And the exclusion amount is that percentage times income. But when it totals those figures, it then breaks it down to the three totals - Total State Income from Municipal and US Territory Obligations held indirectly which is the totals of the exclusion amount (% times income). Total income from municipal bond obligations issued in your state and owned by you directly. And Total Potential State Tax Exclusion from Municipal and US Territory Obligations which is a total of the first two totals.

It seems to me that I would enter the totals of the exclusion amounts into the breakdown of which state the exempt-interest dividends came from, but on the other hand, it sounds like the Total Potential State Tax Exclusion from Municipal and US Territory Obligations might be the correct number.