Question on State for Vanguard Stocks

Forum|Forum|4 years ago
February 16, 2022
7 replies
88 views

I live in California State and own Vanguard stock such as VWLUX, VWIUX and VMLUX, for which I see tax-exempt dividends in my Vanguard tax form. Turbo Tax asks me the following question when I import Vanguard tax form. Please confirm if I should enter California (where I live) as the state and if not, where should I get the state for those tax-exempt dividends?

Question from Turbotax:

Choose the state where your tax-exempt dividends came from

This is for the dividends of <> from Vanguard Marketing corporation vanguard brokerage.

Best answer by JulieS

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).

JulieSAnswer

Level 15

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.

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).

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

johnsantaclara1Author

Level 5

Hi JulieS, Thanks again! I chose "I earned tax exempt dividends in more than one state" and am calculating for each of my funds for CA like you advised.

One quick question: For the "State" drop down on the top, Should I still choose "More than One State" or "California"?

Thanks again!

ErnieS0

Level 15

Split your tax exempt dividends between California and Multiple States.

California does not tax dividends received from California state or municipal obligations if at least 50% of the fund’s assets would be exempt from California tax when held by an individual. So you'll need a CA amount and multiple states for it to total out.

Your funds may also have US government interest. To enter that amount, select the box A portion of these dividends is US government interest on the screen Tell us if any of these uncommon situations apply to you.

2020 Supplemental Guidelines to California Adjustments

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

johnsantaclara1Author

Level 5

Thank you. My question to JulieS was about 1) whether to choose California or More than one state in the dropdown at the top before entering the amounts below the check box as shown in this picture. 2) If the way I have entered (as an example) in the 2nd screen shot below is the right way. Thank you.