Question

Edward Jones Exempt Interest Dividends

Forum|Forum|2 years ago
April 4, 2024
1 reply
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Every year I am unsure how to enter Exempt Interest for dividends.

figures listed in my support documents for federal obligation exclusions and potential state tax exclusions from municipal and US territory obligations, which is broken down with an exclusion amount for Illinois (the state I live in) and us territories exclusion amount. I have no idea what I need to do with this information.

M

mglauner

First, tax-exempt dividends reported in Box 11 of a 1099-div are not taxed federally, but are taxable for states other than the issuing state.  If the interest is from a multi-state bond fund or ETF, the fund company will provide supplemental information showing the percentage breakdown of interest by state.

You would calculate the amount of interest from issuers in your resident state by multiplying that percentage by your total interest and reporting that with the two-digit code of your state.  The remainder is reported as 'More Than One State'.  Resident state interest won't be taxed by your resident state, but the other state interest will be.

Second, US government obligations are taxed by the federal government, but are not taxed by states. Again, the mutual fund or ETF will provide supplemental information about the percentage of interest or dividends that are US government obligations.  Multiply that percentage by your total amount received and enter that.  That will be excluded from state taxation.

Here's more info on Exempt Interest Dividends.