Case: I helped a married couple file their 2025 individual income tax return this year. They filed as Married Filing Jointly (MFJ). The husband lived in Washington state for all of 2025. The wife lived in Virginia from January 1, 2025, through January 26, 2025, and then moved to WA to live with her husband for the remainder of the year.For their original state returns, I filed a Virginia Part-Year Resident Return (Form 760PY) using the following residency periods:Husband: 1/1/2025–1/1/2025 (to satisfy the software requirement that both spouses appear on the joint federal return) Wife: 1/1/2025–1/26/2025The wife recently informed me that she forgot to provide a Form 1099 issued by the Department of the Treasury. They would now like to file an amended return to report this additional interest income.The Form 1099 contains the following information:Date: 12/19/2025 Description of security: IAAAA Series I Savings Bond Box 3 – Interest on U.S. Savings Bonds and Treasury Obligations: $1,900My questions:Based on the 12/09/2025 date shown on the Form 1099, does the $1,900 of interest income belong entirely to Washington, since the wife was a Washington resident at that time? Or should the interest be allocated between Virginia and Washington based on the amount of time she lived in each state during 2025? Do I actually need to file an amended Virginia return in this situation? I prepared a draft amended Virginia Form 760PY, and the only change is an increase to Line 1 (Federal Adjusted Gross Income) and Line 7: Income attributable to your period of residence outside VA. However, the Virginia taxable income and tax liability remain exactly the same as on the original return, resulting in no change to the tax due or refund.Many thanks!

Cash basis taxpayer has income when they receive cash. This is WA-source income.No need to amend VA.I would anticipate no change to WA income, either. Treasury interest isn’t taxable by states. If you were amending due to an IRS notice, I might amend the state returns because what they get from the IRS information-sharing system is basically “this person who lives in your state had unreported income you might like a share of.” In your situation, I might amend WA if it’s essentially the same amount of work as amending Federal (everything can be e-filed, no additional software charges, whatever review process you use has minimal extra time to confirm the expected result and appropriate presentation), but I’d also consider amending just the federal return.

W

workhard2022

Level 5

Solved

Amended Return Questions – Treasury Interest Form 1099

Forum|Forum|24 days ago
July 23, 2026
6 replies
51 views

Case: I helped a married couple file their 2025 individual income tax return this year. They filed as Married Filing Jointly (MFJ). The husband lived in Washington state for all of 2025. The wife lived in Virginia from January 1, 2025, through January 26, 2025, and then moved to WA to live with her husband for the remainder of the year.

For their original state returns, I filed a Virginia Part-Year Resident Return (Form 760PY) using the following residency periods:

Husband: 1/1/2025–1/1/2025 (to satisfy the software requirement that both spouses appear on the joint federal return)
Wife: 1/1/2025–1/26/2025

The wife recently informed me that she forgot to provide a Form 1099 issued by the Department of the Treasury. They would now like to file an amended return to report this additional interest income.

The Form 1099 contains the following information:

Date: 12/19/2025
Description of security: IAAAA Series I Savings Bond
Box 3 – Interest on U.S. Savings Bonds and Treasury Obligations: $1,900

My questions:

Based on the 12/09/2025 date shown on the Form 1099, does the $1,900 of interest income belong entirely to Washington, since the wife was a Washington resident at that time? Or should the interest be allocated between Virginia and Washington based on the amount of time she lived in each state during 2025?
Do I actually need to file an amended Virginia return in this situation? I prepared a draft amended Virginia Form 760PY, and the only change is an increase to Line 1 (Federal Adjusted Gross Income) and Line 7: Income attributable to your period of residence outside VA. However, the Virginia taxable income and tax liability remain exactly the same as on the original return, resulting in no change to the tax due or refund.

Many thanks!

Best answer by PhoebeRoberts

Cash basis taxpayer has income when they receive cash. This is WA-source income.
No need to amend VA.
I would anticipate no change to WA income, either. Treasury interest isn’t taxable by states. If you were amending due to an IRS notice, I might amend the state returns because what they get from the IRS information-sharing system is basically “this person who lives in your state had unreported income you might like a share of.” In your situation, I might amend WA if it’s essentially the same amount of work as amending Federal (everything can be e-filed, no additional software charges, whatever review process you use has minimal extra time to confirm the expected result and appropriate presentation), but I’d also consider amending just the federal return.

PhoebeRoberts

Answer

Intuit Community Champion

Cash basis taxpayer has income when they receive cash. This is WA-source income.
No need to amend VA.
I would anticipate no change to WA income, either. Treasury interest isn’t taxable by states. If you were amending due to an IRS notice, I might amend the state returns because what they get from the IRS information-sharing system is basically “this person who lives in your state had unreported income you might like a share of.” In your situation, I might amend WA if it’s essentially the same amount of work as amending Federal (everything can be e-filed, no additional software charges, whatever review process you use has minimal extra time to confirm the expected result and appropriate presentation), but I’d also consider amending just the federal return.

W

workhard2022Author

Level 5

Thank you very much, Phoebe Roberts. Your comments are very helpful! I didn't file a Washington state return for this client because Washington does not have a state income tax.

PhoebeRoberts

Intuit Community Champion

Ha! You can tell how many West Coast returns I do! I never remember if it’s WA or OR that’s the no state tax one.

sjrcpa

Level 15

Consider that VA will get wind of an amended federal return or CP2000 notice and come calling. Even though there is no change to the VA tax you may want to file the amendment. Or plan to deal with the VA notice later.

The more I know the more I don’t know.

W

workhard2022Author

Level 5

thank you for the reminder. I will still file the amended VA return to avoid these potential issues

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