This is for tax-exempt interest. Does the following only apply for CA residents? I moved out of the US 7 years ago.
50% Tax-Exempt Interest
Certain mutual funds pay "tax-exempt interest" that may be taxable in California if a majority of the assets in the fund from which they were derived are from out-of-state obligations.
Your mutual fund tax-exempt income is not taxable in California if at least one of the following are true:
- 50% or more of the fund's assets are invested in U.S. obligations
- 50% or more of the fund's assets are invested in California tax-exempt obligations
- 50% or more of the fund's assets are invested in combination of U.S. and California tax-exempt obligations
Your annual statement or the statement provided with your 1099 will provide information on tax-exempt interest. The percentage breakdown between federal and states is usually on the back of the statement as well.
