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Interest income from U.S. government obligations is not taxable on your state taxes. You'll have to look through the detailed information on the dividend distributions and figure out how much of the total dividends in Box 1 represents income earned from U.S. federal government and agency bonds. It might take some calculation to find that out. Box 11 represents tax-exempt interest earned on muni bonds issued by states and/or local governments. This is not taxed on your federal taxes, and part or all of it may be tax-free on your state taxes as well.
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