What Percentage of SPAXX Is State Tax Exempt? State Map + Free Calculator
Fidelity’s Government Money Market Fund SPAXX invests in U.S. Treasury bills and notes, U.S. agency debt, and related repos.
And all interest on direct U.S. government obligations such as Treasuries is exempt from state/local income tax, but still fully taxable federally.
SPAXX State Tax Exemption by State
How states treat income from Fidelity Government Money Market (SPAXX)
Hover or tap a state to see details
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After-tax yield comparison
Based on your inputs, the tax-exempt fund earns more after tax:
$0 / yr
Tax breakdown
Projected After-Tax Growth · hover a column for details
What Percentage of SPAXX Is State Tax Exempt?
SPAXX is not 100% state-tax exempt. It is a taxable government money-market fund.
Fidelity annually reports SPAXX’s government-securities income percentage.
For the latest year, that was about 50.90%.
| Fund | State-tax-exempt % |
|---|---|
| SPAXX | 50.90% |
| FDLXX | 98.67% |
| FZFXX | 61.52% |
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Federal vs. State Tax Rates
SPAXX distributions are ordinary interest dividends for federal purposes.
All are taxable at your income-tax rate.
| Tax Type | SPAXX | Note |
|---|---|---|
| Federal tax-exempt | 0% | Generally taxable |
| State tax-exempt | 50.90% | Exempt in most states |
| CA / CT / NY | 0% | Special 50% test not met |
How to Calculate Your SPAXX State Tax Exemption
If you want to calculate your state-tax-exempt portion of SPAXX income, it is fairly straightforward.
You need your total SPAXX dividends and Fidelity’s reported percentage of income earned from U.S. government securities.
1. Find your SPAXX dividend amount
Start with your Form 1099-DIV and find your total ordinary dividends in Box 1a. Then, find SPAXX’s reported percentage of income from U.S. government securities for the tax year.
Fidelity typically provides this percentage on its tax-information webpage or in a supplemental tax letter issued around February.
2. Calculate the potentially exempt amount
Multiply your total SPAXX dividends by the reported government-securities percentage.
For example, suppose you received $1,000 in SPAXX dividends, and Fidelity reported that 50.90% of the fund’s income came from U.S. government securities:
$1,000 × 50.90% = $509
In this example, $509 may qualify for a state tax exemption, while the remaining $491 may be subject to state income tax.
3. Check your state’s rules
Some states, including California, Connecticut, and New York, apply a 50% asset test before allowing an exemption for income from certain government securities.
If SPAXX does not meet the applicable threshold for your state, you may not be able to claim the calculated $509 exemption.
In states that allow the exemption without that additional limitation, the qualifying $509 could generally be excluded from state taxable income.
4. Report the exempt amount on your state return
If your state allows the exemption, follow your state tax return's instructions for reporting interest or dividend income from U.S. government obligations.
Depending on the state, there may be a specific line for subtracting federally tax-exempt or U.S.-government-obligation income.
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Is SPAXX State Tax Exempt in All States?
No, interest on U.S. government obligations is protected by federal law and states cannot tax it.
So, in principle, every state’s tax law allows excluding interest from U.S. Treasuries.
But many states impose conditions or thresholds on mutual funds.
- California
- Connecticut, and
- New York require that at least 50% of the fund’s assets be in U.S. obligations each quarter before granting any exemption.
SPAXX’s holdings hover around that line, so these states treat SPAXX’s dividends as fully taxable, even though roughly half of it is from Treasuries.
SPAXX Tax Reporting FAQ
SPAXX dividends are generally reported on Form 1099-DIV as ordinary dividends, and they are subject to federal income tax.
No. Fidelity generally provides the percentage of income from U.S. government obligations separately, which you can use to calculate the portion that may be exempt from state tax.
SPAXX income is generally taxable federally, while qualifying municipal bond fund income may be exempt from federal income tax.
No. SPAXX does not have a tax-exempt share class; investors seeking tax-exempt money-market income need to consider other Fidelity funds.
SPAXX income inside an IRA or 401(k) generally isn't currently taxable, so you don't report the annual distributions on your personal tax return.
You generally won't owe state income tax on SPAXX income if your state doesn't impose an individual income tax, although federal taxes still apply.
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