Vanguard sent me a flyer "U.S. government obligations information" that contains the percentages of income from certain mutual funds that are from federal bonds, etc. For example, their Federal Money Market Fund and their Prime Money Market Funds have income from federal bonds. The flyer states that this income is usually EXEMPT from taxation in most states.
Yeah! That is great news!
However, where do I enter this into Turbotax (desktop DVD version)?
If it matters, I'm in California.
I live in North Carolina and I have a feeling that mutual fund dividends from government obligations are not exempt in North Carolina . Is that right?
I know interest from government obligations are but I have a feeling mutual fund govt obligations dividends are not though in most state they are
Can someone verify this
You may have to do some research to determine what is being reported on your 1099 form. US government securities do not pay dividends, they only pay interest. So, normally income from investments in mutual funds that hold US government securities would be interest income and exempt from taxation in North Carolina.
However, your mutual fund may report gains and losses on the sale of US government securities, and those gains or losses would be taxable or deductible as capital gains.
I assume the "dividends" you are referring to is actually interest income, but you would have to verify that with your broker.
Any idea where this option is now with today's (Feb 2024) online version? No extra options are presented when entering 1099-DIV income.