Finance Questions

Posts Tagged ‘government security’

What government securities interest is usually exempt from state taxes?

Government securities interest or Interest income from “direct obligations” of the Federal Government and certain agency obligations is exempt from income taxation in all states (but, it is taxable at the federal level).
The government securities interest on the following popular obligations is generally exempt from state income tax:

• U.S. Treasury Bills, Notes, Bonds
• U.S. Savings Bonds – Series EE and HH
• Federal Home Loan Banks (FHLBS)
• Financing Corporation (FICO)
• General Services Administration
• Tennessee Valley Authority
• U.S. Postal Service
• Production Credit Association
• Federal Land Banks
• Federal Intermediate Credit Bank
• Banks for Cooperatives
• Federal Farm Credit Banks
• Student Loan Marketing Association
• General Insurance Fund
• Commodity Credit Corporation
• Federal Deposit Insurance Corp

The government securities interest on the following bonds is generally subject to state income tax:

• Government National Mortgage Association (GNMA – Ginnie Mae)
• Federal National Mortgage Association (FNMA – Fannie Mae)
• Federal Home Loan Mortgage Corporation (FHLMC – Freddie Mac)