Tax-exempt income for resident and nonresident states

Use
Organizer
,
Income
,
Income
,
Tax-exempt income
to enter resident and nonresident state tax-exempt income and nontaxable dividends.
You can also allocate expenses between taxable and tax-exempt income and enter information on dividends subject to state taxes but not federal taxes.

Tax-exempt income

Use the
Detail
column to review or edit the detail. The description field's mandatory when entering any amounts in the detail screen.
In the detail screen for each type of income, either an E or C code can be entered for each item.
  • E = exclude the item from startover state returns only, includes Alabama, California, Hawaii, Iowa, New Jersey, and Pennsylvania
  • C = carries the item to the California state return only
Enter the
Automatic
column to enter amounts without detail. Entries made in this column will override the automatic calculation of detailed items, but the detail will still print.

Nontaxable dividends

Nontaxable dividends are distributed for informational purposes only. They're based on distribution entries made in the Beneficiary Information area of the Organizer.
To include nontaxable dividends in gross income for allocation purposes, make this selection on
Organizer
,
General Information
,
Return Options
,
Compute Options
, and then
Option 204
.

Expenses allocated to tax-exempt income

Enter the amount or percentage of the allocated expense to override the system's calculation.

Fiduciary situs

Resident refers to the fiduciary situs.
For nonresident beneficiaries, all tax-exempt income's considered nonresident. To overcome that presumption, select
Beneficiary Sourcing
and enter municipal income for any states of interest. Enter the entire amount for each state, and this amount will be prorated based on the beneficiary's share.
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