Level 2

Thank, Lisa.  However, I'm not sure if I explained the problem correctly.  As an example, the client received a Form 1099-INT showing $1,000 in Box 1. This will flow the $1,000 to the state (California) tax return.  However, of the $1,000, the sum of $900 was from California bonds that are taxable for Federal Income Tax purposes, but Exempt from California in come tax.  The solution you suggested will not work in the example I just provided.

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