Question

1099-Div says I had tax exempt interest dividend. Entered in TurboTax. It asks me which state interest was earned. No idea. I live in WA state. How do I continue?

Forum|Forum|5 years ago
July 4, 2020
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TurboTax Deluxe Online

TurboTax asks that because even though they are exempt Federally, some states will tax exempt interest/dividends from another state. But Washington has no state income tax, so it's moot.

The popup help for that screen says "You can select More than one state and continue if you live in a state with no income tax (such as AK, FL, NV, SD, TX, WA, WY)."

EDITED:

See my next comment with 2 screen images that show you 2 ways to get to the choice "multiple states", which will let you continue.

M

mesquitebean

@ kevinntax I've added a second image, that will show you that actually, you can get to the choice "multiple states" either way there, and the end result should be the same for your situation in Washington state, which has no state income tax. See these 2 screen images:

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K

kevinntaxAuthor

I selected Washington on one of the questions. See picture. Was this incorrect? I wasn't sure if this was asking about the states which the mutual fund invests in muni-bonds or the state that I lived in. Maybe I should have picked "I earned exempt-interest dividends in more than one state" and picked "multiple states". I didn't see it or understand it. I've already submitted my tax return to the IRS. But, not sure if matters since I live in WA state.