Fund-Specific Information For Your Tax Returns

To access tax information for a specific fund, use the Fund Search below. Enter a fund name, fund number, NASDAQ symbol or CUSIP number in this box, and select the fund from the menu. You will then be taken to the Tax Information section of that fund’s product page.

Tax Center

Percent of Income Attributable to Direct U.S. Government Obligations for 20151


At least 1% of the 2015 income earned by the following funds was attributable to direct U.S. government obligations:

 

Franklin Adjustable U.S. Government Securities Fund 2.24%
Franklin Flexible Alpha Bond Fund 1.54%
Franklin Global Government Bond Fund 19.91%
Franklin Low Duration Total Return Fund 3.00%
Franklin Multi-Asset Real Return Fund2 8.51%
Franklin Real Return Fund 41.82%
Franklin Strategic Income Fund 1.70%
Franklin Total Return Fund 2.46%

Information for those funds with less than 1% of 2015 earned income being attributable to direct U.S. government obligations will be available by mid-February on the Search by Fund for Tax Information page of the Tax Center.

States generally grant tax-free status to interest income earned from direct obligations of the U.S. government. This tax-free status may also apply to dividend distributions mutual fund shareholders receive from a mutual fund’s investment in such obligations.

Direct obligations of the U.S. government include U.S. Treasury bonds, notes, bills and certificates, U.S. savings bonds and many obligations issued by agencies of the U.S. government (such as the Federal Home Loan Bank, the Federal Deposit Insurance Corporation [FDIC] and many other federal agencies).

The income on repurchase agreements and mortgage-backed securities, including Government National Mortgage Association (GNMA or Ginnie Mae) securities and Federal National Mortgage Association (FNMA or Fannie Mae) securities, does not qualify for tax-free treatment.

Depending upon your state’s laws, you may be entitled to declare a percentage of your income dividends as tax-exempt income on your 2015 state personal income tax return.1,3

You can determine the amount of your income derived from direct U.S. government obligations by multiplying the percentage found here by the total ordinary dividends you received during the calendar year, as reported on your Form 1099-DIV, Box 1a.

The 2015 income dividends you received from your Franklin tax-free income fund(s) are fully exempt from regular federal income tax. Based on income the fund earned from state tax-exempt obligations, a portion of such dividends may also be exempt from your state’s personal income tax. For investors subject to the alternative minimum tax, a portion of fund dividends may be taxable. Distributions of capital gains and ordinary income, if any, are generally taxable.1

You can determine the portion of income dividends that are attributable to bonds of a particular state and U.S. territories by multiplying the percentage found here by the amount of tax-exempt income dividends for each fund as reported on Form 1099-DIV, Box 10.

Important Message for California Shareholders: Each fund is required to report to the Franchise Tax Board by May 31, 2016, your total 2015 payments of tax-exempt income interest dividends (exempt from federal income tax), and the percentage of this total that is attributable to bonds of California and U.S. territories.

Important Message for Indiana and Utah Shareholders: If you are a resident of Indiana or Utah and own shares in Franklin tax-free income funds, a portion of your tax-exempt dividends may be subject to state income tax. See State Tax Information for additional information.

The following table lists the percentage of your 2015 income dividends that may qualify for exemption in your state. This percentage should be multiplied by the amount of tax-exempt interest dividends paid by each fund as reported on your Form 1099-DIV, Box 10.2

 

 Franklin Federal Tax-Free Income FundFranklin Federal Inter.-Term Tax-Free Income FundFranklin High Yield Tax-Free Income FundFranklin Insured Tax-Free Income FundFranklin Federal Limited-Term Tax-Free Income Fund
STATE
Alabama 1.23% 2.71% 2.09% 5.02% 1.07%
Alaska 0.61% 0.13% 0.06% 0.65% 0.58%
Arizona 2.43% 5.75% 2.36% 2.95% 2.56%
Arkansas 0.10% 0.20% 0.00% 0.44% 0.44%
California3 13.17% 11.14% 16.77% 10.62% 6.63%
Colorado 2.20% 1.83% 3.36% 3.50% 0.60%
Connecticut3 0.03% 1.10% 0.16% 0.32% 1.99%
Delaware 0.00% 0.00% 0.00% 0.00% 0.00%
District of Columbia 2.92% 0.00% 2.66% 1.09% 0.00%
Florida 6.94% 8.18% 6.33% 5.48% 6.59%
Georgia 3.78% 1.65% 3.19% 5.02% 3.32%
Hawaii 0.45% 0.57% 0.29% 0.00% 0.00%
Idaho 0.17% 0.00% 0.78% 0.00% 0.13%
Illinois3 5.93% 3.89% 5.61% 7.95% 8.69%
Indiana 1.53% 0.00% 1.62% 0.73% 1.42%
Iowa3 0.00% 0.00% 0.65% 0.00% 0.00%
Kansas4,5 0.15% 0.18% 0.09% 0.00% 0.19%
Kentucky 1.04% 0.62% 1.22% 0.54% 0.90%
Louisiana 1.99% 1.89% 2.98% 3.29% 0.31%
Maine 0.33% 0.00% 0.32% 1.19% 0.00%
Maryland 1.08% 0.95% 0.64% 0.46% 1.76%
Massachusetts 2.67% 1.82% 1.12% 2.76% 1.78%
Michigan 3.15% 3.38% 5.51% 6.63% 5.38%
Minnesota3 0.27% 0.50% 0.42% 0.01% 1.29%
Mississippi 0.60% 0.00% 0.82% 0.55% 0.00%
Missouri 0.64% 0.88% 0.66% 1.21% 0.31%
Montana 0.00% 0.00% 0.00% 0.00% 0.00%
Nebraska 1.67% 0.00% 0.10% 0.14% 0.00%
Nevada 0.31% 1.36% 0.41% 1.71% 3.91%
New Hampshire 0.31% 0.22% 0.31% 0.33% 0.48%
New Jersey 3.36% 8.47% 3.52% 2.51% 6.83%
New Mexico 0.05% 0.00% 1.95% 0.00% 2.87%
New York 7.79% 10.67% 4.42% 5.25% 12.06%
North Carolina 1.97% 1.65% 0.81% 0.42% 1.31%
North Dakota 0.32% 0.00% 0.00% 1.72% 0.00%
Ohio 3.04% 6.29% 2.22% 2.87% 5.46%
Oklahoma4 0.00% 0.00% 0.07% 0.02% 0.59%
Oregon 0.93% 1.55% 0.29% 0.27% 0.03%
Pennsylvania4 2.72% 4.91% 1.70% 6.72% 9.30%
Rhode Island 1.20% 0.00% 0.39% 1.94% 0.68%
South Carolina 1.39% 1.26% 0.92% 2.55% 0.10%
South Dakota 0.44% 0.00% 0.00% 0.19% 0.00%
Tennessee 0.23% 0.63% 1.01% 0.50% 1.57%
Texas 10.45% 8.49% 8.21% 5.50% 3.81%
Utah 1.26% 0.58% 0.00% 0.00% 0.19%
Vermont 0.54% 0.00% 0.00% 0.00% 0.00%
Virginia 0.21% 2.99% 0.92% 0.41% 0.20%
Washington 3.07% 2.65% 2.55% 1.73% 1.48%
West Virginia 0.61% 0.00% 0.61% 0.62% 0.00%
Wisconsin3 0.85% 0.23% 0.59% 1.51% 0.45%
Wyoming 0.06% 0.00% 0.32% 0.00% 2.74%

 

 Franklin Federal Tax-Free Income FundFranklin Federal Inter.-Term Tax-Free Income FundFranklin High Yield Tax-Free Income FundFranklin Insured Yield Tax-Free Income FundFranklin Federal Limited-Term Tax-Free Income Fund
TERRITORIES
American Samoa 0.00% 0.00% 0.00% 0.00% 0.00%
Guam 0.00% 0.09% 1.57% 0.00% 0.00%
N. Marianas 0.00% 0.00% 0.00% 0.00% 0.00%
Puerto Rico 3.75% 0.59% 6.79% 1.50% 0.00%
Virgin Islands 0.06% 0.00% 0.61% 1.18% 0.00%

 

Related Pages

Click on the appropriate link below to display that state’s tax information for certain Franklin Templeton funds.

  • A portion of any long-term capital gain distribution made by a Franklin Templeton fund may be eligible for a partial subtraction from Arizona gross income. This information is available by request. Please contact Shareholder Services at (800) 632-2301 for additional information.

  • The state of Indiana provides that income earned from non-federal government entities outside of Indiana (non-Indiana municipal bonds) is subject to Indiana income tax unless at least one of the following applies:

    1. The income is derived from bonds purchased prior to January 1, 2012; or
    2. The income is derived from Indiana obligations; or
    3. The income is derived from federal government obligations, including U.S. territories.


    For additional information, visit the Indiana Department of Revenue website at www.in.gov/dor.

    Indiana Income Tax Information Bulletin #19 is being amended to clarify the impact of the statute above as it relates to taxpayers earning such income via mutual fund holdings. Indiana taxable percentages for some Franklin Templeton tax-free income funds, based upon direct holding of various obligations, are found below. For information about how to report this on your Indiana individual tax return, please contact your tax advisor.

    Percentages for other funds are available by calling Shareholder Services at (800) 632-2301.

    2015 Indiana Taxable Income
    Franklin California Tax-Free Income Fund 33.00%
    Franklin Federal Intermediate-Term Tax-Free Income Fund 40.00%
    Franklin Federal Limited-Term Tax-Free Income Fund 60.00%
    Franklin Federal Tax-Free Income Fund 20.00%
    Franklin High Yield Tax-Free Income Fund 30.00%
    Franklin Insured Tax-Free Income Fund 11.00%

     

  • The state of Utah provides that income earned from non-federal governmental entities outside of Utah (non-Utah municipal bonds) is subject to Utah income tax unless at least one of the following applies:

    1. The income is derived from bonds purchased prior to January 1, 2003; or
    2. The income is derived from Utah obligations; or
    3. The income is derived from federal government obligations, including U.S. territories; or
    4. The income is derived from obligations of another state that does not tax Utah obligations.

    The Utah State Tax Commission lists the states and political subdivisions that do not tax Utah obligations on its website at www.incometax.utah.gov/additions/municipal-bond-interest.

    Utah taxable percentages for some Franklin tax-free income funds are found below. Percentages for other funds are available by calling Shareholder Services at (800) 632-2301.

    For information about how to report this on your Utah individual tax return, please contact your tax or financial advisor.

    2015 Utah Taxable Income
    Franklin California Tax-Free Income Fund 85.00%
    Franklin Federal Intermediate-Term Tax-Free Income Fund 80.00%
    Franklin Federal Limited-Term Tax-Free Income Fund 83.00%
    Franklin Federal Tax-Free Income Fund 68.00%
    Franklin High Yield Tax-Free Income Fund 66.00%
    Franklin Insured Tax-Free Income Fund 78.00%