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How to enter adjustment to ordinary dividends for 2023 California return

engtax_56

In my 2022 California CA(540) return I did through freetaxusa last year, I can see on the California adjustments form Part 1 line 3 for Ordinary dividends, I have a federal amount in Column A, and a Subtractions in column B. I can see in the California Summary the subtraction amount is marked as "U.S. Treasury Interest"

How can I enter a Subtractions value for this adjustment on my 2023 California return? I don't see a way to make this subtraction in the 2023 return. Thank you.

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KeriC

Hello @engtax_56. I recommend logging into your account and contacting customer support. They will be able to view your account information and can guide you accordingly.

sleestax

Closely related question: Box 2a on my FreeTaxUSA DRAFT Form 1040 shows the federal tax-exempt interest (from munis) aggregated from all of the 1099s I have manually entered. Will these data automatically get added to my income for my state income tax filing? Or do I need to manually include this as an "addition" to income for state income tax purposes?

KeriC

@sleestax There is a page after you enter your 1099-INT with tax-exempt interest income that will ask if you have state tax-exempt interest. As long as you answer NO, the amount will automatically carry over as an addition to your state income.

BillA

https://community.freetaxusa.com/discussion/comment/1348#Comment_1348

I have the OP's situation as well. I'm not seeing the secondary page you mentioned.
When you say "…with tax-exempt interest income…" are you referring to an amount in box 8 of the 1099-INT, or just a 1099-INT that has income that could be excluded from state tax?

sleestax

https://community.freetaxusa.com/discussion/comment/1348#Comment_1348

Thank you. These are mutual funds so they are 1099-DIV in this case but same idea. I will try this. I recall having to answer "yes" to be prompted to manually enter — but you are saying that if I answer "no," the software will then know to do the right thing? (For me, it's Box 12 on a 1099-DIV but looks like that is Box 8 on a 1099-INT.)

engtax_56

OP here, I finally figured it out based on input from everybody's posts.

My specific case, I have a 1099-DIV that has mutual fund dividends based off US Treasury bills which are federally taxed but state tax exempt. To flag this as state tax exempt, I did this.

Income → 1099DIV

Click YES box for "Is this a mutual fund that has U.S. Government interest income?"

Next screen fill in the box at the prompt:

"You've told us that this mutual fund has U.S. Government interest income. This income is not taxed by states. Enter the amount of your $xxxx of ordinary dividends that are from U.S. Government interest:

Then this will show up as a subtraction from the state income.