Franklin Templeton Investments
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Frequently Asked Questions

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  • Obligations issued by the U.S. government such as Treasury bills, U.S. savings bonds and U.S. agency obligations are known as direct U.S. government obligations.

  • States generally grant tax-exempt status to income from direct U.S. government obligations. This tax-exempt status also applies to dividend distributions paid to fund shareholders as a result of investing in these types of securities. Depending on the law in your state, you may be entitled to declare a percentage of fund ordinary income dividends as tax-exempt income on your state personal income tax return. However, some states impose minimum investment "threshold" requirements or other restrictions on the "pass through" of this exempt-interest income. Please consult your tax advisor to determine the rules relating to tax-exempt U.S. government income in your state.

  • The percentage of income your fund earned from direct U.S. government obligations is available on the Tax Information page for each fund located on this website. Please use fund search for the tax information for a specific fund.

  • Ordinary income dividends paid by funds as a result of investing in direct U.S. government obligations are generally exempt from state and local taxation. Government National Mortgage Association (GNMA or Ginnie Mae), Federal National Mortgage Association (FNMA or Fannie Mae), and Federal Home Loan Mortgage Corporation (FHLMC) securities are guaranteed by the U.S. government, but are not issued by the U.S. government. A small percentage of income from direct U.S. government securities may mean that your fund invests primarily in these types of guaranteed securities.

Important Legal Information

The information contained in this Tax Center is not intended to be a complete discussion of all federal or state income tax requirements. This information cannot be used by an investor to avoid any income tax penalties that may be imposed under the Internal Revenue Code. Investors should seek advice from a financial and/or tax advisor about the potential tax implications of their investments in Franklin Templeton fund(s) based on their individual circumstances.

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