How to enter 1099-DIV exempt-interest dividends for an individual return in Lacerte (2024)

FAQs

How to enter 1099-DIV exempt-interest dividends for an individual return in Lacerte? ›

How to enter 1099-INT or 1099-DIV tax-exempt interest in Lacerte. Tax-exempt interest reported on a 1099-INT or 1099-DIV is entered on either Screen 11, Interest Income (1099-INT, 1099-OID

For California residents only, the information for tax-exempt interest dividends is being reported to the California Franchise Tax Board.

Are Exempt Interest Dividends Taxed? Exempt interest dividends from mutual funds aren't taxable, but you should report them on your return if you're required to file. Dividends exempt from interest might be subject to Alternative Minimum Tax (AMT).

Go to Screen 12, Dividend Income (1099-DIV). Under the Dividend Income section, enter the Name of payer. Refer to Entering Form 1099-DIV, Box 3 for more information.

Tax-exempt interest dividends are reported in Box 11 on Form 1099-DIV. The amount shown in Box 11 on Form 1099-DIV should be reported on your Federal income tax return on IRS Form 1040 or Form 1040A. Amounts reported in Box 11 on Form 1099-DIV are NOT subject to Federal income tax.

Key Takeaways

Report any tax-exempt interest shown in Box 8 of the 1099-INT on the “tax-exempt interest” line of your tax return. Including federal tax withheld shown in Box 4 of the 1099-INT on your tax return could reduce the amount of tax you'll owe or increase your refund.

You may also have a filing requirement. See the Instructions for Form 8938. Box 12. Shows exempt-interest dividends from a mutual fund or other RIC paid to you during the calendar year. See the Instructions for Form 1040 for where to report.

Box 1a of your 1099-DIV will report the total amount of ordinary dividends you receive. Box 1b reports the portion of box 1a that is considered to be qualified dividends. If your investment makes a reportable capital gain distribution to you, it will be reported in box 2a.

Boxes 2e and 2f apply only to foreign persons and entities whose income maintains its character when passed through or distributed to its direct or indirect foreign owners or beneficiaries. It is generally treated as effectively connected to a trade or business within the United States.

How do I report a 1099-DIV on my tax return? ›

Answer: Enter the ordinary dividends from box 1a on Form 1099-DIV, Dividends and Distributions on line 3b of Form 1040, U.S. Individual Income Tax Return, Form 1040-SR, U.S. Tax Return for Seniors or Form 1040-NR, U.S. Nonresident Alien Income Tax Return.

You can find tax-exempt interest and dividends information in your 1099 form, on the page that says “Mutual Fund and UIT Supplemental Information.” Since our funds are national, you may need to select “More Than One State” when you file your taxes.

In the Dividends and Distributions section of your Form 1099, you may have a value in Box 12: “Exempt-interest dividends.” This value represents dividends received from ETFs like MUB, which hold a broad range of U.S. municipal bonds that pay federal tax-exempt dividends.

An exempt-interest dividend is a yield issued by certain, qualifying mutual funds. Investors who receive exempt-interest dividends do not have to pay federal income taxes on this money, although they may owe state taxes depending on their jurisdiction.

Tax-exempt interest is reported on Schedule K in the corporation return. To enter tax-exempt interest in a corporation return, from the Main Menu of the Business Tax Return (Form 1120) select: Schedule K - Other Information. Tax-Exempt Interest Received/Accrued.

Section 897 gain.

If any part of the ordinary dividend reported in box 1a or capital gain distributions reported in box 2a is attributable to section 897 gains, report that gain in box 2e and box 2f, respectively.

Tax exempt interest income can be found on IRS Form 1040-line 2a.