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State Tax Exempt Interest

Nancy Gates avatar
Written by Nancy Gates
Updated over 3 weeks ago

At this time, Boldin does not have a feature for state tax-exempt interest.

The software computes and taxes interest annually for accounts with the Ordinary Income tax treatment. And, any interest will increase savings balance based upon the rate of return you enter.

If you want more granularity and to account for state tax free interest income, we generally recommend the following:

  1. Create an Investment account

  2. Select Ordinary Income Tax treatment

  3. Set the rate of return to zero

  4. Add a Pension to represent the monthly interest

For bonds that are tax free at the state level, add annual interest as a pension and

select "Federal Only" for taxes

NOTE: Due to the lack of a specific feature for tax exempt assets, the Planner will not recognize the interest in the MAGI for IRMAA when using this method.

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