@ihateincometax
It has nothing to do with box 12....box 12 is only for Exempt interest from municipal bonds only.
[Additonal Edits]
AND you do not add Ordinary and Qualified dividends together. You just take the ordinary dividends issued by that particular fund x the percentage (as a decimal of course)
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Edit the 1099-DIV.
On one of the pages AFTER the main form page, there are some checkboxes.
You click one for "A portion of these dividends is US Government interest."
Then on one of the pages that follows, you will enter the proper $$ amount that you calculated was from the US Govt. No explanation required, but keep a copy of the Vanguard sheets showing the % from US Govt.
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AND...those living in CA, CT and NY cannot claim those $$ at all, unless the fund holds at least 50% of it's holdings in US Govt Securities. Those that qualify are usually marked somehow as "*" or not "*" in the Brokerage sheets (I'm looking at the Fidelity sheets..i don't know how Vanguard indicates the proper ones for CA,CT, & NY residents)
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____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
