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If your interest is exempt from New Jersey only:

  1. From within your TaxAct® return (Online or Desktop) click on the Federal tab
  2. Click Investment Income to expand the section, then click Interest Income (Form 1099-INT)
  3. Click Add to create a new copy of the form, or click Review to review a form already created
  4. Select Step-by-Step Guidance
  5. When you come to the screen titled Interest Income - 1099-INT Income, enter the amount of your New Jersey state exempt interest in Box 3 Interest on U.S. Savings Bonds and Treasury Obligations

The amount you enter in Box 3 will be added to the total interest income on the federal return, and will be included on New Jersey Form NJ-1040, Line 15a or Form NJ-1040NR, Line 15.

If the interest is exempt from Federal Only OR Federal AND New Jersey:

  1. From within your TaxAct return (Online or Desktop) click on the Federal tab
  2. Click Investment Income to expand the section, then click Interest Income (Form 1099-INT)
  3. Click Add to create a new copy of the form, or click Review to review a form already created
  4. Click Step-by-Step Guidance to enter or review the information
  5. If you have interest that is FEDERALLY EXEMPT, continue until you reach the Interest Income - Tax-Exempt Interest screen and enter this amount in the Box 8 Tax-exempt interest field.
  6. If you have FEDERAL AND STATE EXEMPT interest, continue until you reach the Interest Income - State Tax-Exempt Interest screen and click Yes
  7. Enter the amount from Box 8 that is exempt in the Amount from box 8 that is both federal and state exempt interest field.

Example of federal and state exempt:

You have $2,000 dollars of total interest, with $1,000 being federally exempt and $300 being New Jersey exempt. Enter $1,000 in Box 1 of Form 1099-INT. The $1,000 that is federally exempt is entered in Box 8. The $300 that is exempt from New Jersey taxes is entered in the field Amount from Box 8 that is both Federal and State exempt interest.

In this example, the following interest income would be reported on the federal and New Jersey returns:

  • Form 1040, Line 8a = $1,000
  • Form 1040, Line 8b = $1,000
  • New Jersey Form NJ-1040, Line 15a or Form NJ-1040NR, Line 15 = $1,700
  • New Jersey Form NJ-1040, Line 15b = $300

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