tax-exempt dividends/income (and Turbotax)

[JohnEyles]

Starting in 2006, brokerages are required to report tax-exempt
dividends/interest (like that from municipal bonds) on your form
1099-INT. It's federally tax-exempt, but generally taxable by the
states. Formerly you were on your honor to examine your
brokerage statement and report the income - no longer.

My question concerns how this change is handled in Turbotax.
You now enter the tax-exempt interest as part of entering your
1099-INT in the "interest" section. But then, after your enter
dividends, in the next section, it asks about tax-exempt dividends.
Seems like those already got entered with the new 1099-INT
format, and maybe they just forgot to remove that section from
the "Easystep" interview. Am I missing something ?

[KM]

Yeah, I actually ran into that myself and entered it in both places. When I printed my return, I knew something was wrong. So I went back and just entered it under the INT and not the Dividend.

[d]

interest and dividends are different animals.

[KM]

Yes, they are. I assumed if they received a 1099-INT it was for tax-exempt interest. At least that was how mine was reflected. Are you saying that tax-exempt dividends are being reported on 1099-INTs as tax-exempt interest?