In this section, you will find information to assist you in meeting state and federal tax reporting requirements for your T. Rowe Price Tax-Free Fund investments. The total tax-free income earned on each of your tax-free investments and the portion, if any, subject to the alternative minimum tax (AMT) calculation are reported on your Form 1099-DIV, which is mailed to you in late January.
Municipal Bond Funds Tax Facts
Exhibit 1—Sources of National Tax-Free Funds' Income
Exhibit 2—Taxability of State Tax-Free Funds' Dividend Income
Exhibit 3—Percentage of Income to Include in the Alternative Minimum Tax Calculation
Municipal Bond Funds Tax Facts
Although income dividends from municipal bond funds are generally exempt from federal tax, here are some reminders:
Because of the complexity and diversity of state requirements, you may want to consult a tax professional or contact your state tax authority on taxability of income and gains and other reporting requirements. If you need help regarding your personal federal tax filings, you may want to consult a tax professional or contact the IRS.
Exhibit 1— Sources of National Tax-Free Funds' Income
Depending on your state's tax laws, the portion of your income dividend attributable to interest earned by a fund on securities issued by your state may be exempt from your state's tax. Please check your state's requirements. To determine this portion, multiply (1) the percentage of your fund's dividend that may be exempt from your state's income tax listed below by (2) the amount of exempt-interest dividends for your fund as reported in Box 12 of your Form 1099-DIV. In addition, check your state's rules to see if you also may exclude the percentages attributable to U.S. territories.
| Origin | Intermediate Tax-Free High Yield | Tax-Free High Yield | Tax-Free Income | Tax-Exempt Money | Tax-Free Short-Intermediate |
|---|---|---|---|---|---|
| Alabama | 2.02% | 1.53% | 1.58% | 0.00% | 3.89% |
| Alaska | 0.04% | 0.01% | 0.15% | 0.72% | 0.21% |
| Arizona | 1.99% | 1.53% | 1.27% | 1.34% | 1.48% |
| Arkansas | 0.32% | 1.38% | 0.00% | 0.00% | 0.00% |
| California1 | 4.46% | 7.37% | 7.47% | 6.53% | 5.08% |
| Colorado | 3.46% | 4.19% | 2.66% | 2.24% | 5.29% |
| Connecticut | 0.82% | 1.24% | 0.54% | 0.95% | 2.32% |
| Delaware | 2.80% | 0.93% | 0.57% | 0.00% | 0.01% |
| District of Columbia | 1.75% | 2.42% | 3.20% | 1.76% | 2.85% |
| Florida | 6.50% | 4.79% | 5.22% | 5.38% | 5.53% |
| Georgia | 2.89% | 2.78% | 7.80% | 3.21% | 5.55% |
| Hawaii | 0.00% | 0.00% | 0.00% | 0.19% | 0.19% |
| Idaho | 0.13% | 0.59% | 0.11% | 0.07% | 0.00% |
| Illinois2 | 6.33% | 5.60% | 6.02% | 3.06% | 6.26% |
| Indiana3 | 11.05% | 12.08% | 8.94% | 2.47% | 7.94% |
| Iowa4 | 0.03% | 0.02% | 0.02% | 0.20% | 0.74% |
| Kansas | 0.18% | 0.08% | 0.29% | 0.81% | 0.00% |
| Kentucky | 1.97% | 2.12% | 2.05% | 0.51% | 1.56% |
| Louisiana | 1.70% | 1.26% | 1.51% | 1.47% | 0.42% |
| Maine | 0.00% | 0.00% | 0.00% | 0.02% | 0.00% |
| Maryland | 8.53% | 5.03% | 8.25% | 6.02% | 7.51% |
| Massachusetts | 0.12% | 0.53% | 0.95% | 1.34% | 0.45% |
| Michigan | 2.35% | 1.27% | 2.40% | 2.64% | 1.66% |
| Minnesota1 | 0.30% | 0.16% | 0.53% | 2.52% | 1.13% |
| Mississippi | 0.02% | 0.01% | 0.02% | 1.08% | 0.00% |
| Missouri | 0.87% | 2.20% | 2.52% | 2.20% | 1.00% |
| Montana | 0.00% | 0.42% | 0.00% | 0.00% | 0.00% |
| Nebraska | 0.00% | 0.05% | 0.04% | 0.84% | 0.18% |
| Nevada | 0.49% | 0.35% | 1.31% | 1.31% | 0.79% |
| New Hampshire | 1.23% | 0.39% | 0.83% | 0.00% | 0.00% |
| New Jersey | 2.71% | 2.40% | 5.22% | 0.80% | 4.98% |
| New Mexico | 0.00% | 0.00% | 0.01% | 0.00% | 0.00% |
| New York | 5.20% | 4.59% | 8.17% | 10.94% | 5.01% |
| North Carolina | 0.91% | 1.82% | 3.06% | 0.15% | 3.73% |
| North Dakota | 0.39% | 0.00% | 0.00% | 0.00% | 0.00% |
| Ohio | 2.54% | 5.77% | 3.52% | 3.57% | 1.02% |
| Oklahoma4 | 0.95% | 1.65% | 1.22% | 0.48% | 0.18% |
| Oregon | 0.02% | 0.24% | 0.03% | 1.59% | 1.12% |
| Pennsylvania | 4.37% | 5.22% | 2.57% | 2.92% | 1.19% |
| Rhode Island | 0.12% | 0.11% | 0.00% | 0.98% | 0.14% |
| South Carolina | 1.12% | 1.19% | 1.44% | 2.82% | 1.27% |
| South Dakota | 0.00% | 0.26% | 0.53% | 1.87% | 0.05% |
| Tennessee | 0.77% | 0.82% | 1.54% | 2.42% | 1.17% |
| Texas | 6.95% | 7.05% | 5.84% | 14.42% | 8.58% |
| Utah5 | 28.11% | 27.02% | 23.11% | 28.97% | 31.51% |
| Vermont | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Virginia | 4.72% | 4.54% | 8.11% | 4.63% | 7.52% |
| Washington | 1.65% | 1.16% | 1.58% | 1.09% | 2.65% |
| West Virginia | 1.15% | 0.34% | 0.05% | 0.00% | 0.00% |
| Wisconsin4 | 3.86% | 3.66% | 0.41% | 2.75% | 0.39% |
| Wyoming | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| U.S. Territories | |||||
| Guam | 0.42% | 0.26% | 0.00% | 0.00% | 0.00% |
| Northern Marianas | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Puerto Rico | 8.64% | 8.02% | 3.25% | 0.00% | 7.89% |
| Virgin Islands | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Origin | Summit Municipal Income | Summit Municipal Intermediate |
|---|---|---|
| Alabama | 1.47% | 2.82% |
| Alaska | 0.00% | 0.16% |
| Arizona | 2.04% | 1.98% |
| Arkansas | 0.46% | 0.00% |
| California1 | 10.94% | 6.97% |
| Colorado | 2.66% | 2.69% |
| Connecticut | 1.12% | 1.40% |
| Delaware | 0.61% | 0.15% |
| District of Columbia | 3.39% | 3.77% |
| Florida | 6.54% | 4.68% |
| Georgia | 5.49% | 6.80% |
| Hawaii | 0.13% | 0.29% |
| Idaho | 0.44% | 0.37% |
| Illinois2 | 3.13% | 4.34% |
| Indiana3 | 4.27% | 6.54% |
| Iowa4 | 0.14% | 0.50% |
| Kansas | 0.42% | 0.21% |
| Kentucky | 1.09% | 1.37% |
| Louisiana | 1.16% | 0.57% |
| Maine | 0.00% | 0.00% |
| Maryland | 6.82% | 3.51% |
| Massachusetts | 0.73% | 1.63% |
| Michigan | 2.25% | 3.73% |
| Minnesota1 | 0.65% | 0.49% |
| Mississippi | 0.01% | 0.00% |
| Missouri | 0.98% | 0.96% |
| Montana | 0.00% | 0.13% |
| Nebraska | 0.20% | 0.14% |
| Nevada | 0.68% | 0.13% |
| New Hampshire | 0.57% | 0.42% |
| New Jersey | 4.46% | 3.12% |
| New Mexico | 0.01% | 0.04% |
| New York | 9.38% | 10.15% |
| North Carolina | 3.20% | 1.76% |
| North Dakota | 0.00% | 0.00% |
| Ohio | 2.20% | 1.00% |
| Oklahoma4 | 1.08% | 0.00% |
| Oregon | 0.52% | 0.53% |
| Pennsylvania | 2.57% | 1.26% |
| Rhode Island | 0.00% | 0.14% |
| South Carolina | 0.98% | 0.54% |
| South Dakota | 0.53% | 0.07% |
| Tennessee | 1.09% | 1.86% |
| Texas | 8.86% | 8.78% |
| Utah5 | 27.84% | 31.79% |
| Vermont | 0.00% | 0.00% |
| Virginia | 7.12% | 10.26% |
| Washington | 1.83% | 3.85% |
| West Virginia | 0.13% | 0.22% |
| Wisconsin4 | 1.43% | 1.08% |
| Wyoming | 0.00% | 0.00% |
| U.S. Territories | ||
| Guam | 0.04% | 0.00% |
| Northern Marianas | 0.00% | 0.00% |
| Puerto Rico | 3.31% | 6.30% |
| Virgin Islands | 0.00% | 0.00% |
| Origin | Intermediate Municipal Income ETF |
|---|---|
| Alabama | 3.55% |
| Alaska | 0.47% |
| Arizona | 3.78% |
| Arkansas | 0.00% |
| California1 | 6.90% |
| Colorado | 3.96% |
| Connecticut | 3.73% |
| Delaware | 4.42% |
| District of Columbia | 1.00% |
| Florida | 5.77% |
| Georgia | 7.74% |
| Hawaii | 2.38% |
| Idaho | 4.59% |
| Illinois2 | 5.31% |
| Indiana3 | 3.80% |
| Iowa4 | 0.12% |
| Kansas | 0.00% |
| Kentucky | 0.64% |
| Louisiana | 0.07% |
| Maine | 0.00% |
| Maryland | 4.77% |
| Massachusetts | 0.40% |
| Michigan | 0.18% |
| Minnesota1 | 0.00% |
| Mississippi | 0.00% |
| Missouri | 1.56% |
| Montana | 0.00% |
| Nebraska | 0.00% |
| Nevada | 0.00% |
| New Hampshire | 1.63% |
| New Jersey | 6.34% |
| New Mexico | 0.00% |
| New York | 2.89% |
| North Carolina | 1.89% |
| North Dakota | 0.00% |
| Ohio | 0.22% |
| Oklahoma4 | 0.00% |
| Oregon | 0.03% |
| Pennsylvania | 0.95% |
| Rhode Island | 0.00% |
| South Carolina | 0.59% |
| South Dakota | 0.00% |
| Tennessee | 1.19% |
| Texas | 7.38% |
| Utah5 | 23.16% |
| Vermont | 0.00% |
| Virginia | 7.60% |
| Washington | 4.65% |
| West Virginia | 0.00% |
| Wisconsin4 | 0.41% |
| Wyoming | 0.00% |
| U.S. Territories | |
| Guam | 0.00% |
| Northern Marianas | 0.00% |
| Puerto Rico | 2.71% |
| Virgin Islands | 0.00% |
Note: Column totals may add up to more than 100% because income on some bonds is exempt in more than one state.
*Percentages are the same for all fund classes (Investor, Advisor, and I classes).
1All of the dividend income is subject to state tax because minimum threshold requirements were not met.
2Illinois does not exempt the portion of dividends from state or local obligations held indirectly through a mutual fund.
3Includes interest earned on obligations of Indiana and U.S. territories, as well as non-Indiana obligations that the fund acquired before January 1, 2012.
4Some dividend income may be subject to tax. Only certain specified obligations are exempt in this state. Please consult with your tax professional.
5Includes interest earned on Utah and applicable non-Utah obligations, including U.S. territories, and interest on certain states' obligations acquired before January 1, 2003.
Exhibit 2— Taxability of State Tax-Free Funds' Dividend Income
All of the funds' dividends are exempt from federal income tax, and certain portions also will be exempt from state taxes for investors filing in that state.
To determine the state tax treatment of your fund dividends, multiply the percentage shown below by each fund's tax-free dividend income shown in Box 12 of your Form 1099-DIV. This amount is exempt from state tax.
| T. Rowe Price Tax-Free Fund* | Percent of Dividend Income Exempt from State Tax |
|---|---|
| California Tax-Free Bond | 100.00% |
| Georgia Tax-Free Bond | 99.89% |
| Maryland Short-Term Tax-Free Bond | 100.00% |
| Maryland Tax-Free Bond | 100.00% |
| Maryland Tax-Free Money | 93.59% |
| New Jersey Tax-Free Bond | 100.00% |
| New York Tax-Free Bond | 100.00% |
| Virginia Tax-Free Bond | 99.80% |
*Percentages are the same for the Investor and I Classes.
Exhibit 3— Percentage of Income to Include in the Alternative Minimum Tax Calculation
This table is relevant only for investors who must calculate the AMT. It reflects the percentage of income earned by each tax-free fund from investments in "private activity" bonds. Such income is subject to the AMT calculation.
Please note that this table is for informational purposes only. The portion of your exempt-interest dividends, if any, subject to the AMT calculation is reported in Box 13 of your Form 1099-DIV. Please use the Box 13 amount when preparing your tax return, if applicable.
| T. Rowe Price Tax-Free Fund* | Percent of Fund Income Subject to AMT |
|---|---|
| California Tax-Free Bond | 13.62% |
| Georgia Tax-Free Bond | 8.29% |
| Intermediate Tax-Free High Yield | 15.29% |
| Maryland Short-Term Tax-Free Bond | 6.08% |
| Maryland Tax-Free Bond | 8.10% |
| Maryland Tax-Free Money | 8.11% |
| New Jersey Tax-Free Bond | 18.96% |
| New York Tax-Free Bond | 11.69% |
| Summit Municipal Income | 22.09% |
| Summit Municipal Intermediate | 17.88% |
| Tax-Exempt Money | 0.00% |
| Tax-Free High Yield | 16.13% |
| Tax-Free Income | 0.00% |
| Tax-Free Short-Intermediate | 14.06% |
| Virginia Tax-Free Bond | 17.44% |
| T. Rowe Price Tax-Free ETF | Percent of Fund Income Subject to AMT |
|---|---|
| Intermediate Municipal Income ETF | 15.53% |
*Percentages are the same for all fund classes (Investor, Advisor, and I classes).
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