For California, AMD from treasury bills/notes are NOT tax-exempt according to this: FTB says Accrued U.S. Treasury bond market discount interest is subject to California tax. In response to an i...
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For California, AMD from treasury bills/notes are NOT tax-exempt according to this: FTB says Accrued U.S. Treasury bond market discount interest is subject to California tax. In response to an inquiry by Spidell Publishing, the California Franchise Tax Board said accrued U.S. Treasury bond market discount interest is subject to California tax. The market discount interest isn't paid by the U.S. Treasury, so it isn't eligible for an exclusion. It is taxable as ordinary interest income. The income does not represent tax-exempt interest earned on a federal obligation. (Spidell's California Taxletter, October 2024, p. 11, "California treatment of U.S. Treasury bond accrued discount income.") https://taxtrimmers.com/bottomline/2024-10.shtml From my experience, if you hold the treasury bills/notes to maturity, the interest will automatically show up on box 3 of 1099-INT and hence tax-exempt.