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If your interest is exempt from New Jersey only:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Investment Income in the Federal Quick Q&A Topics menu to expand, then click Interest income (Form 1099-INT).
  3. Click + Add Form 1099-INT to create a new copy of the form or click Edit to review a form already created.
  4. Click Quick Entry to scroll down to answer all applicable questions or click Step-by-Step Guidance to proceed with the program interview questions.
  5. On the screen titled Interest Income - 1099-INT Income, enter the 3. Interest on U.S. Savings Bonds and Treasury obligations New Jersey amount, then click Continue.

The amount you enter will be added to the total interest income on the federal return, and will be included on New Jersey Form NJ-1040, Line 16a or Form NJ-1040NR, Line 16.

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

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Investment Income in the Federal Quick Q&A Topics menu to expand, then click Interest income (Form 1099-INT).
  3. Click + Add Form 1099-INT to create a new copy of the form or click Edit to review a form already created.
  4. Click Quick Entry to scroll down to answer all applicable questions or click Step-by-Step Guidance to proceed with the program interview questions.
  5. On the screen titled Interest Income - Tax-Exempt Interest, enter the 8. Tax-exempt interest amount if you have interest that is FEDERALLY EXEMPT, then click Continue.
  6. On the screen titled Interest Income - State Tax-Exempt Interest, click Yes if you have both FEDERAL and STATE EXEMPT interest.
  7. On the second screen titled Interest Income - State Tax-Exempt Interest, enter the Amount from box 8 that is both federal and state exempt interest, then click Continue.

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 Amount from Box 8 that is both Federal and State exempt interest field.

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

  • Form 1040, Line 2a = $1,000
  • Form 1040, Line 2b = $1,000
  • New Jersey Form NJ-1040, Line 16a or Form NJ-1040NR, Line 16 = $1,700
  • New Jersey Form NJ-1040, Line 16b = $300

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