State Income Tax Treatment

State income tax treatment is a topic of concern for any US savings bonds holders with state income tax exemption. Some mutual funds also contain government securities whose interests are exempt from state income tax. Any investors holding government securities with state income tax exemption should be aware of the state income tax treatment of those securities.

State income tax exemption pass through

If you own a mutual fund that invests in certain government bonds or agency bonds with state income tax exemption, you may be able to benefit from the state income tax exemption that is passed through to mutual funds holders.

• Real more of state income tax treatment of mutual funds and other government securities