Computing Your Tax Free Income for Federal Income Tax Purposes

If TurboTax is using a number smaller than you expect, it is either not picking up one of your entries, or it is subtracting out one that you are not expecting. You can narrow the possibilities down by temporarily changing some of your entered values (on the 1099-INT or 1099-OID) and seeing what effect that has on line 2a of the 1040.

The most likely case is that TurboTax is subtracting out a value. Looking at the Line 2a instructions for the 1040 (https://www.irs.gov/pub/irs-pdf/i1040gi.pdf), it mostly matches your expectations.

In general, your tax-exempt stated interest should be shown in box 8 of Form 1099-INT or, for a tax-exempt OID bond, in box 2 of Form 1099-OID and your tax-exempt OID should be shown in box 11 of Form 1099-OID. Enter the total on line 2a.

So that's box 8 of the 1099-INT and box 11 of the 1099-OID.

Digression

But why do they mention box 2 of the 1099-OID? Box 2, as labeled, doesn't seem to be tax-exempt. But the instructions for box 2 say this:

If there is an amount in both boxes 2 and 8, the amount in box 2 is interest on a U.S. Treasury obligation and is exempt from state and local income taxes. If there is an amount in both boxes 2 and 11, the amount in box 2 is tax-exempt interest and is not included in interest income on your tax return.

So if you only have a value in box 11 of the 1099-OID, the first impression is that line 2a of the 1040 should contain the sum of box 8 from the 1099-INT and box 11 from the 1099-OID. But wait! There's more. Those instructions for line 2a go on to say:

However, if you acquired a tax-exempt bond at a premium, only report the net amount of tax-exempt interest on line 2a (that is, the excess of the tax-exempt interest received during the year over the amortized bond premium for the year). Also, if you acquired a tax-exempt OID bond at an acquisition premium, only report the net amount of tax-exempt OID on line 2a (that is, the excess of tax-exempt OID for the year over the amortized acquisition premium for the year).

So those are the most likely things being subtracted out. The bond premium, which is in box 10 of the 1099-OID, and the acquisition premium, which is in box 6 of the 1099-OID.

If you subtract the values in those two boxes, you should get what TurboTax gets.