Where do I indicate that interest income from U.S. Government agency bonds from FFCB & FHLB is state exempt? (2024)

View solution in original post

( NYhas a Mutual Fund 50% of assets holding limit for this type of reporting on a 1099-DIV)

#2)IF the bonds were held within an actual Mutual Fund collection of bonds, and not individual bonds you own directly, then they may issue a 1099-DIV for those $$ instead.....but the 1099-DIV entries may include both state-taxable, and state-non-taxable interest.In that case you just enter all the boxes the 1099-DIV as received form the Mutual Fund company, but on a follow-up page there is a series of checkboxes....one of which says "A portion of these dividends is US Government interest".You check that box and on the next page you enter the exact $$ amount that is from those US govt bonds......you have to calculate the exact amount yourself form the Broker's supplemental information they provide.

Additional info about 1099-INT and 1099-DIV form reporting below and whether you are allowed to deduct from NY income when reported on a 1099-DIV.

1

Interesting though, I notice my TVA bond interest is reported in box 1 of my Fidelity 1099-INT, even though it is supposed to be included to also be considered a US Govt Bond by my state (NC) .NY does too .

IF that is your situation (it's in box 1 of a 1099-INT), then you'd have to handle it in the NY interview portion.In my NC software, there is a place during the interview that I can tell indicate in the software that I have other "Deductions from North Carolina Income"and I can place it there and describe what bonds are involved.

But this would only be in a situation where you hold the individualFFCB & FHLB & TVA bonds, and their bond interest is reported in box 1 of a 1099-INT.Check your broker's supplemental information to see what box they report this interest in...

(now I have to review myself whether it is worthwhile to amend my old NC tax returns for the last 3 years....and I'm puzzled why the TVA interest is not in box 3 of the 1099-INT...that could be an IRS requirement of some kind, for some reason, not yet discovered)
____________________________
Other....1099-DIV situation for NY:
...,....from my recent reading about NY, they seem to have a 50% asset limit for taking a NY deduction for US Govt interest from Bond Funds.i.e, if you have US Govt/TVA/FFCB & FHLB that is reported on a 1099-DIV form, that comes from Mutual fund holdings, then the Mutual Fund the holds the bonds must have at least 50% of it's assets in those US Govt/TVA/FFCB & FHLB holdings...otherwise, you cannot take the NY deduction for those US Govt/TVA/FFCB & FHLB bond dividends.that 50% of assets limit does not apply to NY-issued holdings.

See the second entry on page 3 of: