where is nondividend distributions put on the tax return?

Box 3 is for non taxable distributions. If it is reported in box 3 on the Form 1099 div put it in box 3.

If you double click the row which has the dividendthen another worksheet will appear.

This dividend income worksheet has places for:

addsitional information, with holding information, exempt-interest dividends, adjustment information such as nominee information, margin interest, and a big area for Foreign tax information to get the credit or deduct the foreign tax on Schedule a.

If it is not Nontaxable Distributions in Box 3, it may be Exempt-Interest Dividends.

Double Click the line where you enter the banks name for the dividend and that opens a "Dividend Income Worksheet" Part C is for the Exempt-Interest Dividends.

According to Publication 17 page 64 -

Nondividend Distributions

A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corporation. You should receive a Form 1099-DIV or other statement from the corporation showing the nondividend distribution. On Form 1099-DIV, a nondividend distribution will be shown in box 3. If you do not receive such a statement, you report the distribution as an ordinary dividend.

Basis adjustment. A nondividend distribution reduces the basis of your stock. It is not taxed until your basis in the stock is fully recovered. This nontaxable portion is also called a return of capital. It is a return of your investment in the stock of the company. If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first.

When the basis of your stock has been reduced to zero, report any additional nondividend distribution that you receive as a capital gain. Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock. See Holding Period in chapter 14.

Example.

You bought stock in 1996 for $100. In 1999, you received a nondividend distribution of $80. You did not include this amount in your income, but you reduced the basis of your stock to $20. You received a nondividend distribution of $30 in 2008. The first $20 of this amount reduced your basis to zero. You report the other $10 as a long-term capital gain for 2008. You must report as a long-term capital gain any nondividend distribution you receive on this stock in later years.

Nondividend distributions are not taxable when received, so whether or not they were reported when received, they reduced the basis of the stock. You need to keep some sort of record so that you can determine the basis of the stock when it is sold.