MA state return error in generation of Other Interest and Dividends Excluded form

Forum|Forum|1 year ago
April 2, 2025
1 reply
0 views

In the Federal investments 1099-B input (Step-by-Step or raw form view) TurboTax does have a selection to mark dividends as "A portion of these dividends is U.S. Government interest".
If you select this then it asks "Enter the amount of dividends reported on this 1099-DIV from xxxxxx that represents interest from U.S. Government obligations."

The problem is that on the generated MA tax return in Form 1 "Other Interest and Dividends Excluded form" that excluded amount should be listed on Line 4 if it is from a Mutual Fund Dividend, but in TurboTax it goes to Box 1 instead (TurboTax doesn't have a box/question to ask if it is a mutual fund or not). Actually, given that treasury bonds/bill don't pay dividends, then it would have to be an exclusion from a Mutual fund (reported on Box 4 in the MA state tax return form instead of Box 1 as TTax is doing). For a User to fix this they have to go to Forms view and manually adjust Box 1 and Box 4 in this form (annoying given I paid $45 for the state add-on).
Can you fix this bug so that MA state excluded mutual fund dividends are reported on Line 4 of the MA "Other Interest and Dividends Excluded form" (may or may not require adding another 1099-B DIV input regarding type of exclusion)?

LongTimeUser11Author

There's another way to resolve without override but it is not ideal or fully correct, so the override is better.

In the MA state return if you go to "Other Interest and Dividends to Exclude", you can enter the amount there (you then need to enter a custom description). This will then appear on the state Exclusion Form on Line 8 "Other" along with your description (but not in box 4). Not sure if this triggers some kind of extra check by the MA DOR because it is non-standard. You of course also have to not check the special handling in the Federal 1099-DIV so it is not excluded twice. Actually you need to leave that box checked if you had it checked at some point with a non zero value, and then enter $0 otherwise the old value will be stuck in TurboTax, in other words unchecking the special handling will not delete the old value from the summation in Box 1 of the MA Form Exclusions (Another bug). The zombie old-value will be shown in the Forms view too, but not in the Step-by-Step for the 1099-DIV