It should be via the Exempt Interest Dividends box. Let's say you are a Virginia taxpayer with $500 of such dividends, and $50 is allocated to Virginia. You create one Additional DIV-Info sheet and enter $450 and just put in any state where you are NOT filing a return. Then you create a second Additional DIV-Info sheet where you put $50 and enter Virginia as the responsible state. The net effect will be to add $450 of taxable income to your Virginia return above and beyond your Federal MAGI.
