Sorry, there's some miscommunication. I never meant to imply that 100% of the dividends would be tax free.the language you pasted is saying Whatever the% of government obligations, that's the amount that is tax free in CA, not 100%
i don't know what to tell you.
https://codes.findlaw.com/ca/revenue-an ... 53-99.html
But just to be clear, nowhere in that article does it explicitly connect the 59.87% to "[meeting] the requirements of CA, NY, and CT."
Tixoboy said, "The percentage is 50.5640% which is more than 50%, so that means 50.5640% of the distribution you received from the fund is exempt from CA state tax." That appears to be false, as the fund apparently did not hold 50% of assets by value of USGO. This is easy to imagine if a fund holds 49% treasuries and those treasuries paid slightly more interest than the 51% repos.
The important distinction I was trying to make is that the first yes or no test as to whether a fund can pay out exempt-interest dividends is based on the value of assets held by the fund which is NOT the percentages listed in the Fidelity (or other brokers') USGO documents.
I think we are all in agreement that if a fund passes the threshold, then only the listed percentage of dividends are state tax-free.
Statistics: Posted by toddthebod — Mon Feb 17, 2025 10:29 pm