It's confusing to explain. I do exactly as you say. Enter the tax exempt dividends on the 1099, then TT queries as to how much of that is exempt in various states. I use the % for Arizona and US territories that the brokerage provides for each fund to come up with the amount of the exempt dividends on the 1099 is exempt for Arizona and not exempt, and enter in the Federal section. When I then do the state, those numbers are not entered again all over again, they are populated based on what was calculated for the Federal form and should match. But they don't match and cannot be edited which was the problem.I may not fully understand exactly what you're doing here as obviously you do. TurboTax does not pull any of the information except for the total tax exempt amount.. I used TurboTax but online and my status New Jersey. When I enter tax exempt dividends for the federal part it asks what part is for the state. And then I go through the calculations from the supporting information in the 1099 for the different funds. It sounds like Arizona is doing it backwards and starting as though none of it is tax-free from Arizona and then asking you to add it in. If I have that right, why is that a problem?
At any rate it looks like the problem has self corrected after I deleted all my 1099's that I had entered manually in the Federal section and downloaded them directly from the brokerages. Then re-entered all of the state exempt/non-exempt amounts. After switching back and forth between the State and Federal tax forms a few times the state numbers updated to the correct numbers. There must have been something flaky with the data.
Statistics: Posted by brockmari — Wed Feb 18, 2026 4:34 pm — Replies 6 — Views 275