topic How do I know what state my tax-exempt dividends are from? in State tax filing

How do I know what state my tax-exempt dividends are from?

carol-m-woods — Sat, 01 Jun 2019 00:08:13 GMT

I must have 45 or more states listed with percentages. Wh...

gtmylan — Sat, 01 Jun 2019 00:08:15 GMT

I must have 45 or more states listed with percentages. What do I do with all that info - only have about $800 to report

Generally, tax-exempt interest and dividend income is usu...

MargaretL — Sat, 01 Jun 2019 00:08:15 GMT

Generally, tax-exempt interest and dividend income is usually reported on year-end statements or a statement from your broker or mutual fund company; it's usually listed on the last pages of the statement.

If you have earned tax exempt dividends in more than one state and the amount is insignificant, you may select "more than one state".

See attached picture.

Note - if you have an electronic error and are looking for a specific code for "more than one state", you can enter "XX".

great question. too bad they didn't answer it.

mott-jt — Sat, 01 Jun 2019 00:08:17 GMT

great question. too bad they didn't answer it.

What is amount is 'insignificant', and when does it becom...

simes-c86 — Sat, 01 Jun 2019 00:08:21 GMT

What is amount is 'insignificant', and when does it become 'significant'?

Re: How do I know what state my tax-exempt dividends are from?

dgroves974 — Wed, 25 Mar 2020 03:00:35 GMT

I am ready for the last step. I have paid. I cannot enter XX in the box. My return won't file.

Re: How do I know what state my tax-exempt dividends are from?

DavidD66 — Wed, 25 Mar 2020 03:06:45 GMT

Does question have anything to do with tax exempt dividends? If not, can you start a new question.

Re: I must have 45 or more states listed with percentages. Wh...

annoyed23423 — Fri, 19 Feb 2021 19:16:52 GMT

did you find a solution?

Re: I must have 45 or more states listed with percentages. Wh...

ErnieS0 — Tue, 23 Feb 2021 01:58:28 GMT

You only need to enter the percentage from your state. The rest will be exempt from federal but taxable to your state.

On the screen Which state are your $XXX.XX of exempt interest-dividends from? Check I earned tax-exempt dividends in more than one state.

In the dropdown, select your state and enter an amount. For example if you had $100 in exempt-interest dividends and your sheet says 10% exempt in your state, enter $10 (10% x $100).

On the next line, enter More than One State (the last choice in the dropdown). Enter the rest of your exempt-interest dividends. For example, if $10 was exempt in your state, enter $90 in More than One State ($100 - $10 you put for your state).

Most mutual fund companies have a tax center that will have a sheet showing the tax exempt percentage for your state. Or you can call the company for the information.

Re: I must have 45 or more states listed with percentages. Wh...

null94 — Mon, 01 Mar 2021 17:12:36 GMT

Thank you so much! They need to add this to the help pop ups!

Re: I must have 45 or more states listed with percentages. Wh...

MsC31 — Wed, 30 Jun 2021 18:03:40 GMT

Found a good answer from WealthFront:

Because the underlying bonds that result in these dividends represent a wide range of U.S. states and municipalities, most clients select the option for “Multiple States” and do not select the option for “I earned exempt-interest dividends in more than one state: [Select the FIRST option, then use the dropdown next to it to scroll to the bottom and select "Multiple States". Do NOT select the second option.]

The federal tax exemption for these dividends will apply whether you choose “Multiple States” or provide a state-level breakdown, so it’s really just a matter of the state-level exemption, which is likely very small in proportion.

Note that state tax rules for exempt-interest dividends vary substantially by state. Some states do not tax exempt-interest dividends earned outside the state or have no personal income tax, in which case choosing “Multiple States” makes no difference. Other states like California allow you to exclude dividends paid by that state but tax dividends paid by other states. Please contact your tax advisor for questions specific to your tax situation.

Re: Generally, tax-exempt interest and dividend income is usu...

rapl54 — Fri, 15 Apr 2022 20:08:38 GMT

I have a 16-page tax reporting statement from the broker. The Form 1099-DIV section for line 11 shows tax-exempt interest dividends, $385.80. Following your guidance, I went to the supplemental details in the back of the tax reporting statement. for the source of the dividends. All I found was the name of the company ( a municipal income mutual fund), and a series of dates when dividends were posted.. There was nothing that would help me answer the question: Which state(s) are the dividends from? On the company's website, I found the fund's portfolio. There are 41 states listed (plus others from outside the U.S.)! So now I could select as a response (1)"I didn't receive the information you're asking me for," (2) "There is more than one state", or (3) risk that $385.80 might be considered "insignificant enough", particularly with my state income tax return to skip through scrutiny without some dire outcome. Any of these alternatives is unacceptable,in view of the time and frustration I've experienced in attempting to sort out a convoluted situation I did nothing to create. Is there some workaround you could propose?

Re: Generally, tax-exempt interest and dividend income is usu...

GeorgeM777 — Sun, 17 Apr 2022 19:11:59 GMT

If you live in a state with no income tax, then you can select multiple states. If you live in a state that taxes income, then you can you can following these steps:

select I earned exempt-interest dividends in more than one state,
select your state,
then enter the amount of the dividends allocable to your state,
then select Multiple states and enter the remaining balance of the dividends.

@rapl54

Re: great question. too bad they didn't answer it.

huffjohndeb — Sat, 04 Mar 2023 16:36:15 GMT

absolutely it looks like robots are "answering" questions like is used to answer history questions.

Question explain the war of 1812

My answer the war of 1812 started in 1812.

Re: I must have 45 or more states listed with percentages. Wh...

booshebach1 — Mon, 26 Feb 2024 07:19:24 GMT

Individual Tax-exempt bonds are easy but in order to claim tax exempt interest for AZ how can you identify that portion from muni mutual funds or ETFs like Vangard or Fidelity. It only shows the total from all states. In order to exempt on AZ state return we need to know what percentage tax free applies to AZ income.

Re: I must have 45 or more states listed with percentages. Wh...

mesquitebean — Mon, 26 Feb 2024 09:56:16 GMT

@ booshebach1 wrote:
Individual Tax-exempt bonds are easy but in order to claim tax exempt interest for AZ how can you identify that portion from muni mutual funds or ETFs like Vangard or Fidelity. It only shows the total from all states. In order to exempt on AZ state return we need to know what percentage tax free applies to AZ income.

If a company does not provide the complete info in it's mailing to you (or your downloaded 1099 composite materials), sometimes you really have to "drill down" to locate the info. It can be a time-intensive Easter-egg hunt each year at the brokerage websites, or even at individual fund/ETF websites to find the percentages by state. I'll go ahead and test the 2 company websites you mentioned, and see what I can come up with. If successful, I will put the steps in examples at the end of this posting that should get you there quickly.

At the major brokerage/fund companies webpage, there is usually a tax info section, sometimes called Tax Center, Tax Info, or similar. Then look for the end-of-year info sometimes called "2023 Tax Supplement" or similar. The terminology varies from company to company.

At the end of each year, they publish the list of funds with exempt interest dividends, and a list of the states and their percentage of the exempt dividends. Here's what I found when I tested the 2 companies you mentioned.

I went to Vanguard's website, selected "personal investor", then chose "resources", then "taxes". At the Taxes page, I scrolled down and chose "Tax Information for Vanguard Mutual Funds" and clicked on GET INFO. I ultimately arrived at this page:

Tax Information for Vanguard Mutual Funds

https://investor.vanguard.com/investor-resources-education/taxes/funds-tax-information

Scroll way down that page to a section with large heading "Most often needed for municipal bond funds".

Right under that, you can view/print/download the PDF titled "Percentages of dividends distributed by state by Vanguard's municipal bond funds"

State-specific bond funds are in Table 1.
Table 2 is Tax-Exempt Interest Dividends by State, and it shows the AZ percentages for 9 municipal funds/ETF.

For Fidelity, at the main page it wasn't obvious, but with trial and error, I figured out you go to the tab "Accounts & Trade", and in the dropdown menu choose "Tax Forms & Information."

Then on the next page scroll down a little, and under "Ways to Prepare," click on the heading "Year-end distributions by Fidelity mutual funds."

On the next page the first tab is "Tax-Exempt Income Information".

Unless you want one of the few state-specific funds shown, navigate to the section "Non-state-specific tax-exempt income information".

To view/download/print a PDF choose the link "Tax-Exempt Income from Fidelity Funds", and you'll see AZ in the list and the percentage columns for the various funds.

Re: I must have 45 or more states listed with percentages. Wh...

booshebach1 — Mon, 26 Feb 2024 17:58:18 GMT

Thanks so much for the details and links.

I will give this a try soon and put a fork in this. Thanks!

Re: I must have 45 or more states listed with percentages. Wh...

mesquitebean — Tue, 27 Feb 2024 06:15:23 GMT

@booshebach1 You're welcome. Good luck.

what states require a return for federal tax exempt dividends

royburnam — Thu, 14 Mar 2024 16:13:26 GMT

what states require a state income tax return for federal tax exempt dividends.

Re: what states require a return for federal tax exempt dividends

mesquitebean — Fri, 15 Mar 2024 00:18:10 GMT

@royburnam wrote:
what states require a state income tax return for federal tax exempt dividends.

I'm not sure what you mean. Are you asking if one has to file state tax returns in multiple states because you had some federal tax-exempt dividends for multiple states--even for states that had no other "state source income" or had no filing requirement otherwise? If you explain more about what is prompting your question and what you need to know, then hopefully someone familiar with state tax returns will be able to comment further.

If you're asking about the filing requirements of a specific state(s), please provide the state name(s.)