In my state, Michigan, income from US Treasury obligations is exempt from state income tax, so when calculating my Michigan dividend income, I exclude any such portion from dividend income received from various mutual funds and use the "% of Income Earned on Direct US Government Obligations", obtained from each mutual fund company, to help calculate this. Do I also need to make a similar adjustment for any mutual fund Capital Gains Distributions listed on Form 1099-DIV and for Capital Gains / Losses resulting from the sale of mutual fund shares listed on Form 1099-B? If so, should I use the same "% of Income Earned on Direct US Government Obligations" as used for dividend income?
