Is SGOV state tax exempt? 95.14% of its 2025 dividends are, in 39 states
iShares reports that 95.14% of the iShares 0-3 Month Treasury Bond ETF's (SGOV) 2025 income came from U.S. government obligations, and marks SGOV as a fund that kept at least 50% of its assets in them at every quarter-end. In 39 states that share of your SGOV dividends is exempt from state income tax. 9 states do not tax dividends at all. The District of Columbia, Hawaii and Kentucky exempt interest on Treasuries you own directly, but we found no rule that extends it to fund dividends.
- The number to use: 95.14% of the ordinary dividends in box 1a of your 2025 Form 1099-DIV from SGOV. Of $1,000 of SGOV dividends, $951.40 is U.S. government income. iShares' statement says the box 1a amount “should be multiplied by the applicable percentages below to obtain the dollar amount of income derived from the sources categorized below”.
- California, Connecticut and New York exempt a fund's U.S. government share only if the fund held at least 50% of its assets in those obligations at the end of each quarter. iShares' footnote for SGOV: “At least 50% of the assets of the fund were invested in Federal Obligations at the end of each quarter of the fiscal year.”
- The share changes every year. It was 96.45% for 2023. Use the figure for the tax year on your return.
- Federal tax still applies. SGOV's dividends are taxed as ordinary income on your federal return; only the state exemption depends on this percentage.
- To see what the exemption is worth on your income, use our cash yield after tax calculator, which compares SGOV with savings, Treasury bills and money funds in every state.
SGOV's dividends in all 50 states and D.C.
| State | SGOV's 95.14% (2025) | The state's rule for fund dividends | Where to subtract it (2025 return) | Source |
|---|---|---|---|---|
| Alabama | Exempt | The part of a fund's dividends that came from interest on U.S. obligations is exempt. | Form 40 Schedule B, Column A. | Alabama 2025 Form 40 booklet; Ala. Admin. Code r. 810-3-14-.02 |
| Alaska | No state tax on dividends | No state income tax on interest. | — | — |
| Arizona | Exempt | The percentage of a fund's distribution that the fund identifies as exempt can be subtracted. | Form 140, line 28. | Arizona Individual Tax Ruling ITR 02-2; Arizona 2025 Form 140 instructions |
| Arkansas | Exempt | Arkansas's 2025 instructions say interest from government securities paid through a mutual fund is exempt. | not included in Arkansas income. | Arkansas 2025 AR1000F/AR1000NR instructions |
| California | Exempt (SGOV met the 50% test) | Only if the fund held at least 50% of its assets in U.S. (or California) obligations at the end of each quarter of its tax year; then the share the fund reports is exempt. Otherwise all of it is taxable. | Schedule CA (540), Part I, line 2, column B. | California 2025 Schedule CA (540) instructions; FTB analysis of AB 3233 (2020), on the quarter-end 50 percent test |
| Colorado | Exempt | Only the part of a fund's income that comes from exempt U.S. obligations can be subtracted. | Form DR 0104AD, line 2. | Colorado: U.S. Government Interest |
| Connecticut | Exempt (SGOV met the 50% test) | Only if the fund held at least 50% of its assets in obligations federal law protects from state tax at the end of each quarter; then the share the fund reports is exempt. Otherwise all of it is taxable. | Schedule 1, line 39. | Conn. Gen. Stat. 12-701(a)(20); Connecticut 2025 CT-1040 instructions |
| Delaware | Exempt | The dollar amount or percentage the fund reports as coming from U.S. obligations is exempt. | Form PIT-RES, line 5. | 30 Del. C. 1106; Delaware 2025 PIT-RES instructions |
| District of Columbia | Taxed in our calculator | The District's law exempts interest and dividends on U.S. obligations, but we found no District guidance on fund dividends. The calculator treats them as taxable. | Schedule I, Calculation B, line 1. | D.C. Code 47-1803.02; District of Columbia 2025 D-40 booklet |
| Florida | No state tax on dividends | No state income tax on interest. | — | — |
| Georgia | Exempt | Dividends from funds that earn interest on direct U.S. obligations are exempt to that extent. | Form 500, Schedule 1, line 10. | Georgia Department of Revenue FAQ; Georgia 2025 IT-511 booklet; Georgia retirement income exclusion |
| Hawaii | Taxed in our calculator | Hawaii's guidance covers obligations you own directly; we found none on funds. The calculator treats fund dividends as taxable. | Form N-11, Hawaii Subtractions Worksheet, line a. | Haw. Rev. Stat. 235-7; Hawaii Form N-11 instructions |
| Idaho | Exempt | The portion of a fund's interest attributable to direct U.S. obligations is exempt; the fund must identify it. | Form 39R, Part B, line 3. | Idaho Form 39R instructions |
| Illinois | Exempt | The part of a fund's distribution attributable to U.S. obligations, as the fund determines it, is exempt. | Schedule M, line 22. | Illinois Schedule M instructions; Illinois Publication 101 |
| Indiana | Exempt | The proportionate share of a fund's dividends from direct U.S. obligations is exempt. | Schedule 2, line 4. | Indiana Information Bulletin #19 |
| Iowa | Exempt | The portion of a fund's net dividends attributable to direct federal securities is exempt; you need the fund's statement of the percentage. | Schedule 1, lines 1 and 2, column B. | Iowa Schedule 1 instructions; Iowa Admin. Code 701-302.52 |
| Kansas | Exempt | Only the portion of a fund's distribution attributable to exempt federal obligations is exempt. | Schedule S, line A12. | Kansas 2025 individual income tax booklet; Kansas Form 200, local intangibles tax |
| Kentucky | Taxed in our calculator | Kentucky's law, regulation and forms cover interest on U.S. obligations but say nothing about fund dividends. The calculator treats them as taxable. | Schedule M, line 8. | 103 KAR 1:130 |
| Louisiana | Exempt | Amounts a fund identifies as income from U.S. government obligations are exempt; if the fund does not identify the amount, it is taxable. | Schedule E, code 01E. | Louisiana 2025 IT-540 instructions |
| Maine | Exempt | A fund can pass the exempt character of U.S. obligation interest through to shareholders. | Schedule 1S, line 1. | Maine Revenue Services: Government bonds |
| Maryland | Exempt | The part of a fund's dividends attributable to U.S. obligation interest is exempt, even if the fund earned less than half its interest from them. | Form 502SU, code ab. | Md. Tax-General 10-207; Maryland Administrative Release 11 |
| Massachusetts | Exempt | The part of a fund's dividends attributable to U.S. obligation interest is exempt if the fund identifies it in a written notice within 60 days after its tax year ends. | Schedule B, line 6a. | M.G.L. c. 62, 2 |
| Michigan | Exempt | Investment companies that invest in U.S. obligations can pass the exemption through to shareholders. | Schedule 1, line 10. | Michigan 2025 MI-1040 booklet |
| Minnesota | Exempt | Multiply ordinary dividends by the percentage of qualifying federal interest your fund reports. | Schedule M1M, line 14. | Minnesota: U.S. government interest |
| Mississippi | Exempt | A fund's dividends are exempt to the extent they represent interest that would be exempt if you held the securities directly. | Form 80-108, Schedule B. | Miss. Admin. Code 35.III.2.04 (archived copy) |
| Missouri | Exempt | The part of a fund's distribution from direct U.S. obligations is exempt; attach the fund's year-end statement. | Form MO-A, Part 1, line 8. | Missouri 2025 MO-1040 instructions; 12 CSR 10-2.155 |
| Montana | Exempt | The part of fund dividends from U.S. obligations is exempt. | Form 2, Schedule I, subtractions line 9. | Mont. Code Ann. 15-30-2120 |
| Nebraska | Exempt | The percentage of dividends the fund reports as from U.S. obligations is exempt; list the fund on Schedule I, line 16. | Schedule I, line 15. | Neb. Rev. Stat. 77-2716 |
| Nevada | No state tax on dividends | No state income tax on interest. | — | — |
| New Hampshire | No state tax on dividends | No state income tax on interest. | — | — |
| New Jersey | Exempt | Distributions attributable to interest on federal obligations are exempt whether or not the fund is a New Jersey qualified investment fund. | reported as tax-exempt interest, line 16b. | New Jersey GIT-5; New Jersey 2025 NJ-1040 instructions |
| New Mexico | Exempt | Fund dividends identified on the fund's annual statement as from U.S. obligations are exempt. | PIT-ADJ, line 9. | New Mexico 2025 PIT-ADJ instructions |
| New York | Exempt (SGOV met the 50% test) | Only if the fund held at least 50% of its assets in U.S. obligations at the end of each quarter of its tax year (repurchase agreements do not count toward the 50%); then the share the fund reports is exempt. Otherwise all of it is taxable. | Form IT-201, line 28. | New York 2025 IT-201 instructions; TSB-M-86(7)I; TSB-M-88(5)I |
| North Carolina | Exempt | Only distributions the fund reports as interest on direct U.S. obligations are exempt; you cannot use the percentage of the fund's holdings. | Form D-400, Schedule S, line 18. | 17 NCAC 06B .4103 |
| North Dakota | Exempt | The part of a fund's distribution from U.S. obligations is exempt if the fund is a qualified investment fund. | Form ND-1, line 5. | N.D. Cent. Code 57-38 |
| Ohio | Exempt | The amount or percentage a fund reports as from U.S. obligations is exempt. | Schedule of Adjustments, line 26. | Ohio Rev. Code 5747.01; Ohio Information Release IT 1992-01 |
| Oklahoma | Exempt | The percentage of a fund's income from exempt U.S. obligations is exempt; keep the fund's documentation. | Schedule 511-A, line 1. | Oklahoma Form 511 packet |
| Oregon | Exempt | State exempt-interest dividends are exempt if the fund designates them in a written notice within 60 days after its tax year ends. | Schedule OR-ASC, subtraction code 315. | Oregon Publication OR-17 (2025) |
| Pennsylvania | Exempt | Fund dividends from direct U.S. obligations are exempt, using the Pennsylvania percentage the fund reports. It can differ from the U.S. government share the calculator uses. | PA-40 Schedule A, line 7. | Pennsylvania 2025 PA-40 instructions |
| Rhode Island | Exempt | Rhode Island's rulings for specific funds exempt the part of distributions from U.S. obligations. | Schedule M, line 1a. | R.I. Gen. Laws 44-30-12; Rhode Island ruling 96-01 |
| South Carolina | Exempt | The part of a fund's dividends from exempt obligations is exempt; the fund does not need to hold 50% of them. | SC1040, line m. | South Carolina Revenue Ruling 16-2; South Carolina 2025 SC1040 instructions |
| South Dakota | No state tax on dividends | No state income tax on interest. | — | — |
| Tennessee | No state tax on dividends | No state income tax on interest. | — | — |
| Texas | No state tax on dividends | No state income tax on interest. | — | — |
| Utah | Exempt | The percent of fund income from U.S. obligations, as the fund's statement shows it, is exempt. | TC-40A, Part 2, code 71. | Utah Code 59-10-114; Utah Publication 33 |
| Vermont | Exempt | Interest from U.S. obligations held through a fund is exempt to the extent it comes from interest the fund received. | Schedule IN-112, Part I, line 7. | Vermont Technical Bulletin 24 |
| Virginia | Exempt | Fund income is presumed taxable unless the exempt part is substantiated for each distribution; the department generally expects a monthly breakdown from the fund. | Schedule ADJ, line 4. | 23VAC10-110-142; Virginia ruling P.D. 94-281 |
| Washington | No state tax on dividends | No state income tax on interest. | — | — |
| West Virginia | Exempt | Federal interest dividends paid by a regulated investment company are exempt. | Schedule M, line 29. | W. Va. Code 11-21-12; West Virginia 2025 IT-140 instructions |
| Wisconsin | Exempt | Interest from direct U.S. obligations keeps its exempt character when it passes through a fund. | Schedule SB, line 2. | Wisconsin Schedule SB instructions; Wisconsin Tax Bulletin 80 |
| Wyoming | No state tax on dividends | No state income tax on interest. | — | — |
SGOV next to other Treasury ETFs and money funds (2025)
For California, Connecticut and New York the 50% test decides everything: a fund that missed it has none of its dividends exempt there, whatever its U.S. government share. Fidelity marks such funds with an asterisk and explains: “These funds did not meet the minimum investment in U.S. government securities required to exempt the distribution from tax in California, Connecticut, and New York.” Vanguard marks the funds that “meets the threshold requirements for California, Connecticut, and New York”.
| Ticker | Fund | U.S. government share, 2025 | Met the 50% test | Exempt in most states | Exempt in CA, CT, NY | Source |
|---|---|---|---|---|---|---|
| VUSXX | Vanguard Treasury Money Market Fund | 100.00% | Yes | 100.00% | 100.00% | Vanguard, 2025 U.S. government obligations information (January 2026) |
| TFLO | iShares Treasury Floating Rate Bond ETF | 99.21% | Yes | 99.21% | 99.21% | iShares, 2025 U.S. Government Source Income Information |
| FDLXX | Fidelity Treasury Only Money Market Fund | 98.67% | Yes | 98.67% | 98.67% | Fidelity, tax year 2025 government securities supplemental letter |
| SGOV | iShares 0-3 Month Treasury Bond ETF | 95.14% | Yes | 95.14% | 95.14% | iShares, 2025 U.S. Government Source Income Information |
| SHV | iShares 0-1 Year Treasury Bond ETF | 89.80% | Yes | 89.80% | 89.80% | iShares, 2025 U.S. Government Source Income Information |
| VMFXX | Vanguard Federal Money Market Fund (Vanguard's settlement fund) | 66.61% | Yes | 66.61% | 66.61% | Vanguard, 2025 U.S. government obligations information (January 2026) |
| FZFXX | Fidelity Treasury Money Market Fund | 61.52% | No | 61.52% | 0.00% | Fidelity, tax year 2025 government securities supplemental letter |
| SPAXX | Fidelity Government Money Market Fund | 50.90% | No | 50.90% | 0.00% | Fidelity, tax year 2025 government securities supplemental letter |
How we built the table
- Each state's rule was read from its own 2025 instructions, regulations or statutes; the links are in the table. The same rules drive our cash yield after tax calculator.
- The fund figures are the sponsors' own 2025 statements, read again on September 30, 2026.
- iShares' definition of U.S. government obligations includes Treasury bills, notes and bonds and some agency obligations. SGOV holds Treasury bills.
- This page does not cover capital gains from selling SGOV shares, which states tax as ordinary gains.
Rechecks and changes
We will update the figures when the sponsors publish their 2026 statements, usually in January and February.
- . First published.
Sources: iShares, 2025 U.S. Government Source Income Information; iShares, 2023 U.S. Government Source Income Information; Vanguard, 2025 U.S. government obligations information (January 2026); Fidelity, tax year 2025 government securities supplemental letter; and each state's source in the table. Dollars Ahead is not affiliated with iShares, Vanguard, Fidelity or any state. This page reports what the funds and the states publish. It is not tax advice.