When you get to the question, Choose the state where your tax-exempt dividends came from, you should choose More than one state, which is at the bottom of the drop down.
The Vanguard Funds you list here are multi-state municipal bond funds. They are exempt from federal tax, but only the amount that is from your home state, California, is exempt from state tax.
If this is a large amount of exempt dividends, you may want to figure out how much is from California. If you want to list the amount for California, check the box that says I earned tax-exempt dividends from more than one state.
When you get your tax forms, you should also have an enclosure sheet that lists the percentage of tax exempt dividend from each state.
Say your total exempt dividend is $1,000. You check the enclosure and it says that 5.8% is from California. $1000 X .058 = $58 from CA.
In this case, you would select CA and enter $58. On the next line enter More than one state and enter $942 (the rest of the $1000 total).
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