A portion of the dividend income from their municipal bond ETF holdings may be exempt from state income tax, depending on their state’s tax laws. To calculate the state-specific percentages of their municipal bond ETF holdings, please consult materials from the fund provider. To help, here are some resources below to find more specific information about the holdings of various Municipal Bond funds which may be used in their portfolio:
National:
MUB: iShares Tax-Exempt Interest by State
TFI: SPDRS Prospectus information
California State specific:
CMF: iShares Tax-Exempt Interest by State
New York State specific:
NYF: iShares Tax-Exempt Interest by State
Please note that Betterment is not a tax advisor and the information provided should not be construed as tax advice, but should be used for informational purposes only. Please consult a qualified tax professional or the IRS to determine the rules that apply to your clients’ individual tax situations.