25% annual management fee for the Automated Bond Portfolio, just like with our Automated Investing Account. 5K subscribers in the wealthfront community. If you owned shares of any of the Fidelity funds listed in the table on the following pages of this letter during 2020, a portion of the tax-exempt interest dividend income you earned may be exempt from your state’s income tax. Pros. To determine the portion of dividends that may be exempt from your state income tax, multiply the amount of “ordinary dividends” reported in Box 1a of Form 1099-DIV by the percentage listed in the following table. TurboTax Live Basic Full Service. TurboTax Live Full Service Premium. Wealthfront gives investors access to a package of attractive features, including automatic portfolio rebalancing, tax loss harvesting and a portfolio line of credit. g. Follow. Information for state tax reporting This information may help you prepare your state income tax return. Your tax documents can be found on the Documents page, which is accessed from the top menu of your account. If you multiply that $1. 4. 00 may be exempt from state tax. Please consult a tax advisor to determine whether your state allows a tax exemption for that portion of exempt-interest dividends attributable to your state. 5% per year. ) Box 13: Specified Private Activity Bond Interest Dividends If you are subject to the alternative minimum tax (AMT),Qualified dividends are taxed at capital gain rates of 0%, 15%, or 20%, depending on your tax bracket. However, due to legislation, the tax on dividends and interest is being phased out. Foreign tax paid $ 8 . The Gabelli fund is an oddball with high duration/life vs. In a taxable account, the "excess reportable income" amounts you need for a tax return are in USD. g. A look at your 2022 Tax. Consistent with Utah law, these factors. In the dropdown, select your state and enter an amount. 14% ALTERNATIVE MINIMUM TAX The Tax Reform Act. S. 7. , taxable or nontaxable) or holding. STATE TAX INFORMATION We suggest that you contact your tax adviser for assistance in determining the tax treatment of the tax-exempt dividends in your state. Taxes on interest: If your investment. State municipal funds that have interest income derived only from in-state obligations. If you are importing a 1099-DIV and Box 11 (Exempt Interest Dividends) is not $0, TurboTax will show you a screen which asks: “Choose the state where your tax-exempt dividends came from. Cash liquidation distributions $ 10 . I-Bonds are no longer competitive as the rate is expected to plummet to 2% for the next 6 month period. Period considered: Aug. S. TurboTax Live Full Service Premium. 50% 1 ), the Automated Bond Portfolio makes it easy to get the benefits of low-risk, tax-advantaged bonds — without the pesky maturity dates and manual management. the portion of federally tax-exempt dividends derived from interest, on a state-by-state basis. non-profit companies) Pension, provident, preservation, retirement annuity, beneficiary and benefit funds. Tax-Loss Harvesting. 19. 65 Maine 0. included for each Fund. How do I address “exempt-interest dividends” in my tax return or tax software? Cost basis and sale proceeds amount on Form 1099 How do I change the tax year for an IRA. Limited Term Tax-Exempt Bond Fund of America®. This section lists federal tax-exempt interest and exempt interest dividends you received, by security. ”. As with the ESG score, the Socially Responsible portfolios see a sizable improvement in this metric, from an average of 154. TurboTax Live Basic Full Service. Vanguard Short-Term Tax. 85% = $198. It also lists any portion of those payments that is classified as specified private activity bond interest. Rowe Price Tax-Free Fund investments. Alternatives include non penalty CDs and T-Bills (especially 4 month). S. 3%, New York 8. 00% 0. You would be able to deduct the full $80 of investment interest if you itemize. Exempt interest dividends are entered from Form 1099-DIV, Box 10. Investors should carefully consider the investment objectives, risks, charges and expenses of the Wealthfront Risk Parity Fund. The 2019 Form 1099-DIV reports Noncash liquidation distributions in Box 10 and Exempt interest in Box 11. S. Wealthfront generates and automatically reinvests dividends, and uses that positive cash flow to rebalance. I always keep hoping they will fix that. For example if you had $100 total tax-exempt income, $2 would be allocated to your state and $98 to More Than One State for a total of $100. Email us. The distribution deduction would be $15,000. Betterment invests in a variety of state municipal bonds. alternative minimum tax. None of the distributions paid. Wealthfront generates and automatically reinvests dividends, and uses that positive cash flow to rebalance. 08 as of 11/17/2023 (updated daily) Fund. Note: At. CMF: iShares Tax-Exempt Interest by State; New York State-Specific ETF. 20. Box 12: Exempt-Interest Dividends Represents the amount of tax-exempt dividends paid to you by a mutual fund during the calendar year. In the Dividends and Distributions section of your Form 1099, you may have a values in boxes 7 & 8: “Foreign tax paid” and the corresponding “Foreign country or US. Erin. All of the income from those bonds, other than than those issued within your home state, are taxable by your home state. (See Part 3 for additional information. State identification no. The effectiveness of the Tax-Loss Harvesting strategy to reduce the tax liability of the client will depend on the client’s entire tax and investment profile, including. For background, the vanguard municipal fund consists of bonds from states across the nation. However, dividends that represent payments from otherwise federally tax-exempt entities (but from those outside of the state of New. Only tax-exempt bonds from your specific state get the tax-exempt benefit when it comes to state income taxes. Government obligations is generally exempt from state and local income taxes. TurboTax online guarantees. Expense ratio (0. ETO Tax-Advantaged Global Dividend Opportunities Fund; EADIX Tax-Managed Global Dividend Income Fund (A) CSVIX Calvert Small-Cap Fund (I). Tax-loss harvesting transactions involve selling one ETF that represents an asset class that trades at a loss and replacing it with another similar but not identical ETF. Free Military tax filing discount. We then applied the tax rates in Table 2 to the two components of return to calculate each asset class’s after-tax return. • Box 16 State tax withheld Do your taxes online! AB shareho. 00 Texas 11. 59% Tax-Advantaged Ultra-Short Fixed Income 6. 62 Nebraska 0. There are seven federal income tax brackets, ranging from 10% to 37%. 75 Florida 5. Contact them if you don't have this paperwork. ”. TurboTax Live Basic Full Service. FreeTaxUSA and Wealthfront: State Tax-Exempt Dividends. State identification no. mutual fund or other RIC paid to you during the. 51% Arkansas 0. 3%, Illinois 7. It is designated as such in a written notice that is mailed to the company’s shareholders within 45 days after the end of the taxable year. TurboTax Live Basic Full Service. 25%. S. ETFs are preferable to index funds from a tax standpoint. 42%. 28% New Mexico 0. The 5. For any IRAs (Traditional, Roth, or. II. Dividends paid by a regulated investment company (sometimes referred to as a mutual fund) qualifying under § 852(b)(5) of the United States Internal Revenue Code of 1986 [26 U. Month Interest Dividends (from your statement) Total Percentage of Qualifying Interest Dividends from MA and Applicable U. 20. Virginia Tax-Free Bond. The interest income from taxable bonds is subject to federal, state (and local, if applicable) income taxes. Account minimums for Wealthfront exclusives (the Risk Parity Fund, US Direct Indexing, and Smart Beta) To invest in US Direct Indexing (formerly known as Stock-level Tax-Loss Harvesting) you’ll need to deposit at least $100,000 in your account. Employees that want to claim exempt from Minnesota income tax must use the following form: Form W-4MN, Minnesota Withholding Allowance/Exemption Certificate. You can apply your harvested short-term losses to offset short-term gains; reduce your taxable ordinary income by up to $3,000 per year; carry forward your tax loss to future tax years; or offset long. Specified private activity bond interest dividends $ 14. 7% annual rate of return (the pre-tax, net of fee annual returns Wealthfront’s risk-score 8 tax-advantaged and taxable investment accounts have generated since late 2011). From franchise tax board, California government website: California does not have a lower rate for qualified dividends. Qualified dividends are taxed at 0%, 15% or 20% depending on taxable income and filing status. Tax-Free Short-Intermediate. There's no way to turn this off, unfortunately. Municipal bonds, which are bonds issued by state and local governments, are typically exempt from federal income tax. To indicate a breakdown of the interest from line 11 for state purposes, use the fields available at the bottom of the DIV screen. If you are importing a 1099-DIV and Box 11 (Exempt Interest Dividends) is not $0, TurboTax will show you a screen which asks: “Choose the state where your tax-exempt dividends came from. When you buy VWRL for example, that is functionally the same as converting GBP to USD and buying VWRD. If you want to withdraw, the minimum is $250. , taxable or nontaxable) or holding. We recommend you consult a tax advisor on any questions about state or federal tax treatment of 529 plans. TurboTax Live Premium. Any information on this matter can be found by utilizing our mutual fund tax information page on Fidelity. Market discount on tax-exempt bonds, as well as swap gains, are Taxable distributions 2022 Form 1099-DIV or substitute Form 1099. The student should also receive a 1042-S form from the trader which details any tax to be deducted under. The effectiveness of the Tax-Loss Harvesting strategy to reduce the tax liability of the client will depend on the client’s entire tax and investment profile, including purchases and dispositions in a client’s (or client’s spouse’s) accounts outside of Wealthfront Advisers and type of investments (e. percentage of your fund’s tax-exempt income by state is outlined in the table on page three. CA. 11% expense ratio which. The following table shows the earnings from each state’s municipal bonds as a percentage of the total tax-exempt distributions paid by the fund. Limited. ”. FATCA filing requirement. 1. Dividends exempt from interest might be subject to Alternative Minimum Tax (AMT). 15. TurboTax Live Premium. The Fund invests primarily in investment-grade securities, the interest from which is excludable from gross income for federal income tax purposes (referred to herein as “tax-exempt securities”). Percent Percent Subject Tax- Subject to to Federal Exempt Alternative Fund Income Tax Percentage Minimum Tax California Municipal Bond Fund (EVM) 3. S. The amount in this box reduces your federal tax liability and should be claimed on IRS Form 1040. The first step in entering your 1099-B on your tax return is to transfer the appropriate information to Form 8949. 25; %, which is on par with competitor Betterment’s 0. government securities" (shown below in Column 1) by the amount for that fund in Box 1a of your Form 1099-DIV. State income tax can vary widely across states. Residents from the state of Nevada are only charged the broker’s advisory fee on amounts over $25,000, making the Wealthfront 529 the lowest cost advisor-sold 529 plan. Many revenue bonds with stable and growing sources of revenue sell at quite attractive yields relative to U. 0. Possessions are exempt from state and local taxes. ” ★ How do I address “Foreign tax paid” and "Foreign income" in my tax return or tax software? ★ How do I address “exempt-interest dividends” in my tax return or tax software? ★ Cost basis and sale proceeds amount on Form 1099 For the state-specific funds, income dividends will generally be substantially exempt from federal and local income taxes for a resident of that state. 25% versus 5. 3. TurboTax Live Premium. You can find the state on more detailed info sent from your financial provider. $89,250 for married filing jointly or qualifying widow (er) filing status. 90% . Miscellaneous information details 17 . Federal Income Tax Withheld- Box 4 shows backup withholding. PDFTAX-EXEMPT INTEREST DIVIDENDS BY STATE FOR 2022 Generally, interest income from coupon or "original issue discount" on a qualified municipal obligation is tax-free for federal income tax purposes. After that, you pay a 15% rate if you fall in a tax bracket between $44,626 and $492,300. State requirements are complex, so you should consider consulting a tax advisor for your specific state. This form will also report any interest paid out in your cash account. 4% state), applicable to Wealthfront’s median client weighted by assets. FDIC insurance is not provided until the funds arrive at the program banks. 3. 257. The effectiveness of the Tax-Loss Harvesting strategy to reduce the tax liability of the client will depend on the client’s entire tax and investment profile, including purchases and dispositions in a client’s (or client’s spouse’s) accounts outside of Wealthfront Advisers and type of investments (e. The amount of municipal bond interest from your state, Puerto Rico, the Virgin Islands, and Guam can be calculated by multiplying the total interest dividend you received from a fund (reported as tax-exempt interest on Form 1099-DIV) by the appropriate percentage of interest received from your state, Puerto Rico, the Virgin Islands, and Guam. S. 05)1/12-1) = . This low-cost portfolio is hand-picked by our research team, and is diversified and optimized for the long term. You’ll have to divide your trades into those you held for one year or less, known as short-term trades, and those held longer. Access tax information including closed-end fund, mutual fund and exchange-traded fund forms, cost basis reporting and reporting for corporate actions affecting stock basis. 30%. I then found out that in my own Vanguard brokerage account I have a Vanguard Federal Money Market Fund (VMFXX) that is giving 4. Your Wealthfront account is invested in exchange traded funds (ETFs) managed by outside firms, a mutual fund if you have the Risk Parity Fund, and in individual securities if you have US Direct Indexing (previously known as Stock-level Tax-Loss Harvesting) or Smart Beta. S. Once each month, SGOV distributes a dividend, after which the share price of SGOV goes back down to ~$100. 4. TurboTax Live en español. Portion of total ordinary dividends that may be state tax–exempt . In addition, the amount listed as "Exempt interest" in Box 11 of Form 1099-DIV would not be from U. And vice versa. NerdWallet rating. Minnesota Residents: 100% of your federal tax-exempt dividends for this fund are subject to Minnesota Income Tax. Government Source Income Information Jan 31, 2019 2018 iShares Gold Trust Data Table Jan 31, 2019 2018 iShares Gold Trust Tax. 42%. Betterment invests in a variety of state municipal bonds. 37% 0. Wealthfront is designed to build wealth over time. S. 31% (0% in CA, CT, NY) Fidelity Treasury Money Market Fund (FZFXX) 0. By waiting until around February 15th, we ensure that the most recent investment information is captured in your. municipal bonds that pay federal tax-exempt dividends. In addition, state taxation of retirement benefits is a moving target. The fund base currency is USD. Seeks to provide income exempt from state and federal taxes by focusing on higher quality investments that primarily provide funding for public services and projects in the state of California. State tax withheld $ $ Form . The percentages of income earned by the funds from each state or U. Unless you purchased a bond or bond fund for a particular state, it's. 16 . interest on the next screen. All Wealthfront taxable accounts are eligible for daily tax-loss harvesting. Depending on the amount, you may also have to complete IRS Form 1116. 50 . 49%, or 5. For shares acquired on or after January 1, 2012, only dividends from Indiana sources and dividends from U. Check I earned tax-exempt dividends in more than one state. New York state residents: State laws require that we report federally tax-exempt dividends greater than $10 paid to your account. 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. Malkiel • March 05, 2013. Note: Tax rates include both federal and state tax rates and are based on the typical tax bracket of Wealthfront clients. California, Connecticut, and New Yorkvidendexempt di income only when a fund has mte a certain. 49 North Dakota 0. TurboTax online guarantees. Invest in tax-exempt accounts. 5 billion in harvested losses by an assumed marginal tax rate of 37. Specified private activity bond interest dividends $ 14. Interest income details 17 . And your heirs won't pay an inheritance or estate tax in South Dakota. 63 Arizona 1. Fidelity reports to the IRS and applicable shareholders on Form 1099-DIV exempt-interest dividends distributed from mutual funds. CONTINUED-2-National Limited National High Yield AMT-Free Maturity Municipal State / Municipal Municipal Municipal Municipal Opportunities Territory Income Fund Income Fund Income Fund Income Fund Fund New Jersey 5. State/Jurisdiction BlackRock Allocation. These improvements help minimize taxes and increase returns without exposing clients to more risk. However, there are some states (NY, CT, and CA) that have an “asset test” which requires 50% of the fund’s assets to be U. See Footnotes after Section 5. I can't figure out where to find this information in my forms I downloaded from WF. TurboTax Live Premium. The effectiveness of the Tax-Loss Harvesting strategy to reduce the tax liability of the client will depend on the client’s entire tax and investment profile, including purchases and dispositions in a client’s (or client’s spouse’s) accounts outside of Wealthfront Advisers and type of investments (e. the rest, but is also very good rates though. 10% = $21. Exempt-interest dividends are often associated with mutual funds that invest in municipal bonds. The information provided is current as of the date of this writing, for. You might be able to use this credit against taxes on those investments in the U. State tax laws change over time. territories and possessions can be excluded. parent of the CFC. For individual, joint, and trust Cash Accounts, you will receive a 1099 tax form if your cash account generated more than $10 of interest in the previous calendar year or received $600 or more in awards. This strategy takes a quality-oriented approach to tax-exempt investing, with a focus on investment-grade securities. TurboTax Live tax expert products. 9 . 13% pre-tax). Mark your calendar. government securities" (shown below in Column 1) by the amount for that fund in Box 1a of your Form 1099-DIV. All Wealthfront taxable accounts (individual, joint or trust) are eligible for Daily Tax-Loss Harvesting. You are on the site for: Financial Professionals and Individual Investors. I receive dividends from mutual funds that invest in Treasuries and TIPS that should be partially tax free in my state (IL). If the mutual fund satisfies the 50% plus criterion, you check that box and enter US govt. and municipal bond income) you enter the. For 2023, the limit is $6,500 (up from $6,000 in 2022), plus an additional $1,000 catch-up contribution if you’re 50 or older. Likewise, federal bonds issued by the government are usually tax-exempt at the state and local levels. Enter any interest or dividend income received by a non-Ohio state government, if the interest and/or dividends is not included in your federal AGI. Tax-exempt interest income is reported on box 12 of Form 1099-DIV (box 11 in 2021 and prior, or box 10 in 2018 and prior). That line reads, "Income (interest dividends or gains) received while a. If the trust instrument of the JSA Trust or state law indicates that taxable income must be distributed before tax-exempt income, the distribution would consist of $15,000 in taxable income, and the entire $4,881 net tax-exempt income would be allocated to the trust. Foreign tax paid $ 8 . g. Federal Tax-Exempt Dividend Distribution (from 2021 Tax Reporting Statement) Utah Exempt Percentage of Income (from table) Portion of Dividend Distribution that May Be Exempt from Utah Income Tax $1,000 X 19. These funds did not meet the. You’ll need the amount reported to you in Box 13 of Form. Access tax information including closed-end fund, mutual fund and exchange-traded fund forms, cost basis reporting and reporting for corporate actions affecting stock basis. Only certain taxpayers are eligible. e. That year, you paid $80 in investment interest expenses and had investment income of $160. Vanguard Variable Insurance Funds: Special tax information. See Pub. , taxable or nontaxable) or holding. Rowe Price funds that were designated as Section 163(j) interest dividends. On the reverse side, you’ll find the percentage earned in each state or U. When you’re ready to report and pay your NIIT, you’ll do so via Form 1040. Less withholding also means a bigger . These tax rates are usually lower than regular income tax rates. non-qualified dividends, you will discover the differences in taxation of distinct types of dividends. Until then, the tax rate on dividend and interest income in New Hampshire declines every year until it reaches zero. A client may request spousal monitoring online or by calling Wealthfront at 844-995-8437. Here are seven of the best tax-free municipal bond funds to buy in 2023: Fund. State . The 1099-DIV form doesn’t have a special box broken out for dividends attributed to. So, let’s look at the 2023 tax brackets for single and joint filers of qualified dividends. Exempt interest dividends from mutual funds aren’t taxable, but you should report them on your return if you’re required to file. This form will also report any interest paid out in your cash account. While they don’t exist on the W-4 anymore, it’s still very possible to affect the size of your paychecks by claiming additional withholding or deductions. 7% etc. TurboTax en español. Integrated financial-planning assistance: Although Wealthfront doesn’t provide access to. 7% for a married couple who jointly earn an annual income of $260,000 (the average Wealthfront married couple client) and live in Pennsylvania. 9 — an average decrease of over 30%. In most cases, that would be mutual funds composed of municipal bond investments. 20% 30-day blended SEC yield (after fees, with total returns from March 30, 2023 – November 7, 2023 of 2. Thus removing $20 from NC income, And I only save myself $1 in state taxes since NC would have taxed that income at 5%. g. The final screen asks you to identify the state or states the exempt interest dividends came from. The effectiveness of the Tax-Loss Harvesting strategy to reduce the tax liability of the client will depend on the client’s entire tax and investment profile, including purchases and dispositions in a client’s (or client’s spouse’s) accounts outside of Wealthfront Advisers and type of investments (e. The issue for Colorado/non-Colorado tax-exempt interest seems to be a new issue this year and is presumably a bug. As a side note, the interest of US Treasury is exempt from withholding tax (26 U. We are 47 yo, HNW, highest tax bracket, TX resident, so no state income tax, accounts elsewhere but. , taxable or nontaxable) or holding. territorial obligations) may be exempt from state income tax. 79% in 2022. 87% 8. Based on a client’s tax situation, our goal is to recommend an optimal allocation for them that maximizes after-tax earnings. Interest from Treasury bonds is typically exempt from state income tax, so we include more of them for clients in higher state tax brackets. 00% California 0. 32% 5. This amount is generally exempt from Federal income tax. You also won't pay state taxes on income from dividends or interest in South Dakota. In Box 14, enter the state abbreviation, in Box 15 enter the payer’s state ID number. They are exempt from federal taxes. Important information to guide you and your clients through tax season. If a certain fund isn't listed on that document, then it does not have state exempt income. 019. That deferred tax liability needs to consider the following components: Withholding tax imposed on the dividend; State tax associated with the dividend; 986 Exchange Gain/LossWe will further assume the tax-advantaged accounts have a 9. 24 Kansas 0. 25% management. Currently closer to 75% (3/2023). 550 for more information about OID, bond premium, and acquisition premium. If half of your Social Security benefit plus other income, including tax-exempt muni bond interest, is between $32,000 and $44,000 for a joint tax return ($25,000 to $34,000 for single filers), up to 50% of your Social Security benefits may be taxable. On the interest or dividend line on Sch B worksheet, double click to get the Additional lnfo W/s. 800. So, for example, if a trust earns $10,000 in income during 2023, it would pay the following. Form 1040/1040-SR. of the tax-exempt dividends in your state. multiply the “% of dividends from U. Current Tax Rate is the combined federal + state tax rate applicable to the. For the state-specific funds, income dividends will generally be substantially exempt from federal and local income taxes for a resident of that state. 25% fee but higher than Fidelity Go’s rate of 0% (for accounts above $50,000) or Wealthsimple’s fee of 0. territory during 2020. That percentage varies from year to year. Wealthfront uses more than one program bank to ensure FDIC coverage of up to $2 million for your cash deposits. 00% APY on your uninvested cash, get a portfolio of higher-yield bond ETFs, and diversify for the long term with automated investing. , taxable or nontaxable) or holding period. CONTINUED-2-National Limited National High Yield AMT-Free Maturity Municipal State / Municipal Municipal Municipal Municipal Opportunities Territory Income Fund Income Fund Income Fund Income Fund Fund New Jersey 5. Box 13 is used to report exempt-interest dividends subject to the alternative minimum tax. We recommend you consult your tax advisor for assistance with how this information will impact your specific tax situation. Section 163(j) Dividends (for corporations): The percentage of ordinary income dividends paid by T. of the tax-exempt dividends in your state. For example if you had $100 in exempt-interest dividends and your sheet says 10% exempt in your state, enter $10 (10% x $100). 53 Georgia 1. This is as opposed to standard dividend payments, which can be taxed as either ordinary income or capital gains. After importing your data, you may be prompted by TurboTax to “Tell Us More About Your Exempt Dividends. TurboTax Live Full Service Business Taxes. I’ll detail the changes below, but I also. Pass Through Entity Addback And Ohio Revised Code Section 573340 AdjustmentThe short answer is that many investment firms, including Wealthfront, issue tax documents in mid-to-late February in order to minimize the chance that you receive a restated 1099 and therefore have to refile your taxes. The Vanguard Funds you list here are multi-state municipal bond funds. Indiana publishes a list of “direct” federal obligations exempt from state tax that appears similar to the list above under Explanation of Selected Items. For example if you had $100 in exempt-interest dividends and your sheet says 10% exempt in your state, enter $10 (10% x $100). Dividends are distributions of property a corporation may pay you if you own stock in that corporation. MAGI Statutory Threshold. None of the distributions paid by the funds during 2021 represent a tax preference item (relating to income from private activity bonds) for alternative minimum tax (AMT) purposes. 2023. The Bottom Line. See the Instructions for Form. The amount of municipal bond interest from your state, Puerto Rico, the Virgin Islands, and Guam can be calculated by multiplying the total interest dividend you received from a fund (reported as tax-exempt interest on Form 1099-DIV) by the appropriate percentage of interest received from your state, Puerto Rico, the Virgin Islands, and Guam. S. TurboTax Live Full Service Premium. I recently learned of Wealthfront offering a 4. FreeTaxUSA and Wealthfront: State Tax-Exempt Dividends. That is correct. Exempt-interest dividends $ 13 . I believe that the majority of income from SGOV is subject to Federal taxes, but is exempt from State taxes (CA). 50 . If you have taxable capital gains from your Wealthfront accounts or elsewhere, you can use your harvested tax losses to offset these gains. Box 14-16 are used to report state information. If you are requiredInformation for state tax reporting . This tax-optimization strategy is carried out when one ETF is trading at a. 2. Federal tax treatment. interest dividends that may be exempt from state income tax. REMIC additional information 17 . Further, other states, such as Wisconsin, limit the tax exemption on federally Exempt Interest Dividends to certain specified home state bonds. About this Benchmark. Maybe in the future they'll add recurring withdrawals.