Message Font: Serif | Sans-Serif
 
No. of Recommendations: 1
I'm in NY state. I usually buy T bills but last year I left some additional cash in a US treasury only money fund which derived 100% of its income from US Government Obligations. So like a treasury bill, the interest on this MMF should be tax exempt from state and local taxes. Unfortunately the firm that does my taxes is unsure how to account for it and submit it properly. I looked at Form IT-201 (Resident Income Tax return for NY)and saw that on page 17 it indicates the that the interest belongs on Line 28, exactly where the Treasury bill interest goes. There is one catch. It says that if you include an amount on line 28 from more than one line on IT-201m you have to include a schedule showing the breakdown from each line.

I recall seeing the same instructions, and wondering about the same thing. In 2018, I had interest from T bills and a dab of OID from buying a treasury strip in the secondary market. Fortunately, those both end up on Line 2 of the IT-201. But I also have a sweep account that had ~60% of its income from US Government obligations. I can take the percentage and the total distribution, compute a number, and put in in a box TT has for the 1099-Div; but the income shows up on Line 3 of the IT-201. I quit worrying about it, and let TurboTax do its thing. The total number excluded from NY income was correct, and showed up on Line 28.

Now I go look at the PDF, and I see no schedule like the instructions ask for. But NY requires electronic filing. My return has been accepted, I owe money, it will be paid on April 15. I guess I wait to see if NY has a problem with this. I can't believe I'm the only NY taxpayer with this issue who uses TurboTax; whatever NY does with it is likely to be a routine, standard thing. FWIW, my total Line 28 is smaller than either Line 2 or Line 3, so it shouldn't raise any obvious red flags. A program would have to be doing a check against the 1099-DIVs and 1099-INTs to see that this came from both dividends and interest.

Patzer
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.