Submitted By: someone
Answered: April 29, 2020 10:58 pm

How do I report tax-exempt dividends that are listed in box 11 of Form 1099-DIV?

Tax-exempt dividends represent interest earned by ETFs or mutual funds holding tax-exempt bonds. Thus, the dividends are reported as tax-exempt interest on the federal income tax return (line 2a of Form 1040 or 1040-SR). They are fully tax free for federal income tax purposes, although they are taken into account in figuring the taxable portion of Social Security benefits. However, tax-free interest dividends may receive different treatment on the state tax level (they may be only partially or non-exempt).

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Tax Glossary

Deficiency

The excess of the tax assessed by the IRS over the amount reported on your return.

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