If the interest on your US Savings Bond is not taxable to your state, you can subtract the interest by following the steps below:
- Federal Section
- Income
- 1099-INT, DIV, OID
- Did you earn any interest or dividend income from a bank, brokerage firm or some other financial institution?
- Select Interest Income, Form 1099-INT, then press continue
- Enter amount in the box labeled "Amount of Interest on U.S. Savings Bonds and Treasury Obligations that you want subtracted from your state return"
When an amount is entered, a drop down box will open to select the name of the state that should not be including the interest. The interest is entered in Box 3, Interest on US Savings Bonds and Treasury Obligations, of Form 1099-INT.
Check with your state to determine if the interest on US Savings Bonds and Treasury Obligations is taxable on the state return. If the interest is not taxable to the state, enter the amount here to remove it from the state tax calculations.