The 1099-INT is an interest statement, and the 1099-DIV is a dividend statement. These are both reported on Schedule B. There is an Interest Statement and a Dividend Statement which you can link to from line 1b (for interest) or 5a (for dividends) of the Schedule B by pressing F9. Use these statements if there are more than six items of interest income or more than 10 items of dividend income or if you need a worksheet to enable UltimateTax to correctly handle interest or dividend income, regardless of the number of items. If you use the statement, make all entries on the statement.
Below is information on how to use the columns (these are for interest, but some apply to both interest and dividend statements. Information on dividend-only columns is below.):
Payer (interest and dividend statements) - Type the name of the Payer.
Amount - Type the total amount of interest paid.
TSJ (interest and dividends)- If you need to split income between taxpayer and spouse on the state return or to compare married filing joint vs married filing separately, use this column. Type "T" if the primary taxpayer owns the interest; type "S" is owned by the spouse; type "J" if owned jointly. The amounts entered as "J" (joint) will be split at 50% for the taxpayer and the spouse.
+/- and St Adj (interest and dividends)- These columns affect the state return only. If the interest is taxable on U.S. and state returns, leave the +/- and St Adj columns blank. Use these columns only if the interest must be handled differently on the state return than on the Federal return. Some states require a letter instead of the +/-, so be sure and check the state instructions.
The use of these columns will vary from state to state. To determine exactly how to use these columns, look at the online instructions for the state involved. Press F1 while a state form is visible on your screen to see online state instructions.
NAEOB (interest only)- This column affects the Federal return only. Each letter stands for a different possible adjustment to interest income. Type the correct letter in this column (N, A, E, O, or B)if applicable. If you are unfamiliar with these adjustments, consult a tax reference such as IRS Publication 17.
N = Nominee Distribution
A = Accrued Interest
E = Tax Exempt
O = OID Adjustment (Original Issue Discount)
B = ABP Adjustment. (Amortized Bond Premium)
NAEOB Amount (interest only) - Enter the amount of interest that qualifies for A, O, or B designation, even if it is the same as the amount entered in the Amount column. The amount will be carried to the correct entry on Schedule B.
Early Penalty (interest only)- If Form 1099-INT shows a penalty for early withdrawal, enter that amount in this column. UltimateTax will carry the amount to Form 1040, page 1, as an adjustment to income.
Fed With (interest and dividends)- If Form 1099-INT shows Federal withholding, enter that amount in this column. UltimateTax will add that amount to other withholding and carry the total to the correct line on Form 1040, page 2.
INTEREST or DIVIDEND INCOME TAXABLE ON STATE RETURN, BUT NOT TAXABLE ON FEDERAL RETURN
For interest or dividend income that is exempt (not taxable) on the Federal return but taxable on the state return, follow these steps:
Complete the Payer and Amount columns.
Type + in the +/- column. Some states require a letter instead of the +/-, so be sure and check the state instructions.
Type the taxable amount in the St Adj column. If all the interest on this line is taxable to the state, type in the full amount.
Type E in the NAEOB column.
UltimateTax will include the interest as taxable on the state return but exclude it from taxation on the Federal return.
If the interest is taxable on the Federal return, but not on the state return, Type a - in the +/- column, and type the state exempt amount in the St Adj column. UltimateTax will include the interest/dividends as taxable on the Federal return but exclude it on the state return. Some states require a letter instead of the +/-, so be sure and check the state instructions.
DIVIDENDS ONLY
Some dividend income is Nominee (type N in the N column for Nominee);
Capital gain - Enter your capital gains reported on Form 1099-DIV (amount entered here carries to Schedule D);
N - This column affects the Federal return only. If the taxpayer received the dividends on this line as a nominee (that is, in the taxpayer's name, but the dividends belong to someone else), type the letter N in this box. These dividends are not taxable to the nominee.
1250 gain or 5-year gain - Enter capital gains taxed at 1250 or 5-year gains on 1099-DIV This is a PART of the total capital gain(carries to Schedule D);
Exempt Int Div. - Enter the amount of exempt dividend interest reported on Form 1099-DIV.
Totals from the statement will flow to the correct lines on Schedule B. Totals from Schedule B will flow to Form 1040.
ADDITIONAL FEATURES ON SCHEDULE B AND SCHEDULE B STATEMENT
- To insert a blank line in the Payer/Amount list on Schedule B or the Schedule B statement, press Alt+Insert or Right-click on the blank line and press insert row. The blank line will be inserted above the line on which the cursor was located. The following lines will move down.
- To delete a line, press Alt+Delete or Right click on the line you want to delete and press delete row. The line on which the cursor was located will be deleted, and the following lines will move up.
- To sort the list of items in ascending order (e.g., A to Z, 1 to 9, etc.), press Alt+F9.
- To sort the list of items in descending order (e.g., Z to A, 9 to 1, etc.), press Alt+F10.
The sort will be based on the column in which the cursor is located when you press the sort command. For example, if the cursor is in the Payer column, the items will be sorted alphabetically by the Payer name. If the cursor is in the Amount column, the items will be sorted numerically by amount.
This information applies to all years of the UltimateTax software.
