Hello,
I'd like to clarify the CA tax law for dividends received from mutual funds invested in U.S. obligations.
1. Can you confirm that if the mutual fund has over 50% of funds invested in U.S. obligations then dividends qualify to be CA tax exempt?
2. I need clarification if the entire amount is automatically tax exempt or only the portion/percentage of funds invested in U.S. Obligations is tax exempt. Let me give you a scenario, and tell me which one is correct:
A. Vanguard VMFXX (Federal Money Market Fund):
1. $100 in 2025 Dividends Received
a. 67.7% of fund is in U.S. Gov Obligations
b. Is $67.70 CA tax Exempt???
c. Is entire $100 CA Tax Exempt???
Thank you
