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Federally tax-exempt income dividends information

Federally tax-exempt income dividends: State tax exclusion worksheet 

Federally tax-exempt income dividends you received from American Funds in 2013 are subject to special state income tax considerations. 

Federally tax-exempt income dividends

Federally tax-exempt income dividends you received from American Funds are reported in Box 10 of Form 1099-DIV as well as on your American Funds Year-end Statement.

Although these income dividends are exempt from federal income tax, you must report the total amount of federally tax-exempt income dividends you received.
For investors in American Funds Tax-Advantaged Income Portfolio, 57.87% of the dividends you received (as reported under "Year-to-date: Dividends” in the Activity Detail section of your year-end statement) were exempt-interest dividends.


Alternative minimum tax

The American Funds listed below paid some federally tax-exempt income dividends derived from municipal bond interest subject to the federal Alternative Minimum Tax (AMT). The Tax-Exempt Bond Fund of America® did not pay any federally tax-exempt income dividends derived from municipal bond interest subject to AMT. You will need the amount reported to you in Box 11 of Form 1099-DIV, "Specified private activity bond interest dividends," to calculate your AMT if that tax applies to you. This amount is a portion of the amount in Box 10. 

The calculation of the AMT is complex, and we recommend you consult your tax adviser. 

American Funds with 2013 federally tax-exempt income dividends included in the AMT calculation Percent of federally tax-exempt income dividends included in AMT calculation
American Funds Short-Term Tax-Exempt Bond Fund® 23.94%
American Funds Tax-Advantaged Income PortfolioSM 12.30%
American Funds Tax-Exempt Fund of New York® 10.45%
American Funds Tax-Exempt Preservation PortfolioSM 12.15%
American High-Income Municipal Bond Fund® 22.06%
Limited Term Tax-Exempt Bond Fund of America® 19.10%
The Tax-Exempt Fund of California®  7.81%
The Tax-Exempt Fund of Maryland®  6.29%
The Tax-Exempt Fund of Virginia®  9.53%

State taxation of federally tax-exempt income dividends

All or some of your federally tax-exempt income dividends may be taxable in your state or jurisdiction. In fact, some states, such as California, require that mutual funds report the amount of federally tax-exempt income dividends paid to residents of those states. The states that impose no income tax on federally tax-exempt income dividends are listed below.

If you are an individual taxpayer and the state or jurisdiction where you file an income tax return is not shown below, please refer to the Federally tax-exempt income dividends: State tax exclusion worksheet to determine the portion of federally tax-exempt income dividends that may be excluded for state income tax purposes. (Corporations and other entities in the states listed below may be subject to state income taxation on federally tax-exempt income dividends and may need to complete the Federally tax-exempt income dividends: State tax exclusion worksheet.)

State tax exemption

To the best of our knowledge, the states and jurisdictions listed below do not impose income tax on federally tax-exempt income dividends. If you are an individual taxpayer and the state or jurisdiction where you file a tax return is listed below, all of the federally tax-exempt income dividends from your American Funds are exempt from income taxation in that state or jurisdiction, and you do not need to complete the Federally tax-exempt income dividends: State tax exclusion worksheet.

  • Alaska
  • District of Columbia
  • Florida

  • Nevada
  • North Dakota
  • South Dakota 

  • Texas
  • Washington
  • Wyoming

American Funds Tax-Exempt Fund of New York, The Tax-Exempt Fund of California, The Tax-Exempt Fund of Maryland and The Tax-Exempt Fund of Virginia are 100% invested in municipal bonds exempt from tax in their respective states. Therefore, federally tax-exempt income dividends from these funds may be excluded from state taxable income in their states. For example, if you are a California taxpayer, all of the federally tax-exempt income dividends from The Tax-Exempt Fund of California may be excluded from your California taxable income.

Additionally, federally tax-exempt income dividends from American Funds Tax-Exempt Fund of New York may be excluded from taxable income in New York City.


Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses, summary prospectuses and CollegeAmerica Program Description, which can be obtained from a financial professional and should be read carefully before investing. CollegeAmerica is distributed by American Funds Distributors® and sold through unaffiliated intermediaries.