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deduct from federal agency bonds interest from state taxable income

Forum|Forum|3 years ago
February 17, 2023
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I own several U.S. government backed federal agency bonds that are state tax-exempt (Federal Home Loan Bank, Fed. Farm Credit Bank). Interest from these is included in my brokerage 1099-INT (Box 1).

I cannot find a way in TT to designate that this interest is state tax-exempt in Pennsylvania. In PA Interest Income Worksheet, there is a column "US Govt Interest". If I put the interest earned from the agency bond, the amount is *not* deducted from the total amount from Box 1 of my 1099-INT. What form should I use to be able to properly make the correct adjustment?

Please help!

Best answer by ErnieS0

If you have interest income from federal agency bonds that are exempt from Pennsylvania income tax, make your adjustment on the screen “Interest Income Summary.”

On “Interest Income Summary” tap Edit
On “Adjust Federal Interest Income,” tap Yes
On “Adjust Federal Interest Income, enter the Adjustment Amount as a positive number and select Other Adjustment

E

ErnieS0Answer

If you have interest income from federal agency bonds that are exempt from Pennsylvania income tax, make your adjustment on the screen “Interest Income Summary.”

On “Interest Income Summary” tap Edit
On “Adjust Federal Interest Income,” tap Yes
On “Adjust Federal Interest Income, enter the Adjustment Amount as a positive number and select Other Adjustment

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