In Tennessee, bank interest is exempt, along with various other dividend and interest income. Since the program does not have any way of knowing exactly what type of interest is entered in the Federal portion of the return (which flows to the Tennessee program), the user must adjust the amount of interest taxable to Tennessee on the screen titled Tennessee - Interest Income
and adjust the dividend income taxable to Tennessee on the screen titled Tennessee - Dividend Income
To edit the information on the screens mentioned above:
- From within your TaxAct® return (Online or Desktop), click on the State tab
- Click on Tennessee directly below the blue tabs
- Click on Dividend Income or Interest Income, whichever is applicable
- Click Review and enter the appropriate information in the fields on the following page
The information to help determine exactly which portion, if any, of the interest and dividend income is taxable is available by clicking on the State Form Instructions icon available on the right side of the screen.