Do I need to amend Federal return when amending state return for US Govt. Securities income that's state tax exempt?

You're not alone in this confusion! When dealing with U.S. Government Securities income that's exempt from state tax, you generally don't need to amend your federal return if the amounts there aren't changing. What's happening in TurboTax is that the software uses your federal information as the starting point for state returns, so you need to enter the information at the federal level first. However, this doesn't necessarily mean you need to file an amended federal return. In most tax software, including TurboTax, you should be able to complete the process for the federal amendment (entering the U.S. Government Securities income correctly), but then only actually file the state amendment. There should be an option near the end of the amendment process where you can select which returns to file. I'd recommend going through the entire amendment process in TurboTax, and when you get to the final review/filing stage, look for options to select only the state return for filing.

After struggling with a similar issue last year, I found an amazing tool called taxr.ai (https://taxr.ai) that helped me figure out exactly what forms needed to be amended and why. It analyzes your tax forms and tells you the specific impact of changes across both federal and state returns. With U.S. Government Securities and state tax exemptions, I was totally confused about what needed to be amended. The tool highlighted exactly where that income appears on my federal forms and confirmed I only needed to file the state amendment. Saved me hours of research and worry about potentially creating inconsistencies between returns!

I was totally skeptical about taxr.ai at first, but I tried it after posting here and wow - it actually delivered! Uploaded my returns and it immediately identified that my U.S. Government Securities income was properly reported on Schedule B federally, but missing from my state exemptions section. It confirmed I only needed to file the state amendment, and even showed me exactly where in the TurboTax workflow to select "file state only" during the amendment process. Saved me from potentially filing an unnecessary federal amendment. The analysis showed me the exact forms and line numbers affected, which made me feel 100% confident in what I was doing. Definitely recommend if you're dealing with this weird U.S. Government Securities state exemption issue!

If you're still struggling with this, I had major issues reaching someone at my state's tax department to confirm I could file just the state amendment. I used Claimyr (https://claimyr.com) to actually get through to a human at my state tax office. Check out their demo: https://youtu.be/_kiP6q8DX5c They basically call the tax department for you, navigate all those horrible phone menus, wait on hold, and then call you when they have a real person on the line. Saved me literal hours of hold time. The state tax rep confirmed that for U.S. Government Securities income that's exempt at state level, I only needed to file a state amendment - no federal amendment required. Got this confirmed in writing too, which gave me total peace of mind.

I can't believe I'm saying this, but I tried Claimyr for my U.S. Government Securities state exemption question and it actually worked. After being extremely skeptical (see my previous comment), I decided to try it as a last resort. They got me through to my state tax department in about 40 minutes (I was quoted a 2+ hour wait time when I called directly). The agent confirmed I only needed to amend my state return for the U.S. Government Securities income exemption, and walked me through exactly how to do it in TurboTax without creating federal/state inconsistencies. The agent explained that since the income is already correctly reported on Schedule B federally (it's taxable federally, just exempt at state level), I just needed to complete the exemption section on my state return. Saved me from potentially filing an unnecessary federal amendment and the anxiety of wondering if I was doing it right.

I actually went through this exact scenario with U.S. Government Securities income last year. Here's what I learned: The interest from U.S. Government Securities shows up on your federal Schedule B, but it doesn't get any special treatment federally (it's taxable). At the state level, this income is typically exempt. In TurboTax, you do need to enter the information at the federal level since that's how the program flows, but you don't need to actually file an amended federal return. When you get to the end of the amendment process, there should be checkboxes for which returns you want to file. Just select state only. If TurboTax doesn't give you that option, you might need to call their support. There's definitely a way to amend just the state return, since this is a pretty common scenario.

Quick question for anyone who's done this - when amending just the state return for U.S. Government Securities income, did you have to pay any penalties or interest for the original underpayment? I realized I missed about $2,500 in exempt income on my state return, which wouldn't change my federal taxes but would reduce my state tax by about $150.