California money market fund tax: the 50% rule, fund by fund
Yields as filed for October 29 or October 30, 2026, holdings as of October 31, 2026, California rates for tax year 2025. Not tax or investment advice.
Example result
VUSXX after federal and California tax
2.96%
$1,478 a year kept on $1,945 of dividends
| Dividends before tax | $1,945 |
| Federal tax at 24.0% | −$467 |
| State tax at 9.30% $1,945 of the $1,945 is free of California tax | −$0 |
VCTXX after federal and California tax
2.10%
$1,050 a year kept on $1,050 of dividends
VUSXX leaves $428 more a year than VCTXX.
Yield reported by the fund for October 30, 2026; yields change daily. Estimate, not tax or investment advice. Nothing you type leaves your browser. How it is computed
What California exempts, and when
California taxes money market fund dividends as ordinary income, with one exception that the Franchise Tax Board spells out in the Schedule CA instructions. If a fund held at least 50% of its total assets in obligations of the United States or of California at the close of each quarter of its taxable year, the part of its dividends that came from those obligations is exempt. Interest on Treasuries counts; so does interest on debt of the Federal Home Loan Banks and Farm Credit Banks, which federal law shields from state tax. Repurchase agreements do not count, nor does debt of Fannie Mae and Freddie Mac. The test is all or nothing at the fund level: a fund at 49% on one quarter end gives its shareholders no exemption for the year, even if most of its income came from Treasuries. In the filings behind this site, 92 of the 221 retail government and Treasury share classes were below 50% at the June 30 or September 30 quarter end. For a Californian in the 9.3% bracket at $120,000 of income, that difference alone is worth about 0.27% of yield on a fund like VMFXX.
Single-state municipal funds are the other route: their dividends come from California issuers and are free of both federal and California tax for residents. The data holds 7 California municipal share classes. Their yields are lower, and the calculator above starts with VCTXX against the Treasury fund VUSXX so the trade-off is visible at your income.
Top 15 share classes after tax in California
| # | Fund | You keep (after tax) | Before tax | Type |
|---|---|---|---|---|
| 1 | North Capital Treasury Money Market FundNCGXX | 3.03% | 3.99% | Treasury only |
| 2 | Gabelli U.S Treasury Money Market FundGABXX | 2.96% | 3.90% | Treasury only |
| 3 | Vanguard Treasury Money Market FundVUSXX | 2.96% | 3.89% | Treasury only |
| 4 | Capital Group Central Fund Series - Capital Group Central Cash FundCMQXX | 2.95% | 3.96% | Government |
| 5 | Money Market AccountQCMMFX | 2.94% | 3.95% | Government |
| 6 | Treasury Instruments PortfolioNPYXX | 2.93% | 3.86% | Treasury only |
| 7 | JPMorgan 100% U.S. Treasury Securities Money Market ETFJMMF | 2.93% | 3.86% | Treasury only |
| 8 | NYLIM U.S. Government Liquidity FundMUSXX | 2.92% | 3.84% | Treasury only |
| 9 | SDIT TREASURY II FUNDSCPXX | 2.90% | 3.81% | Treasury only |
| 10 | TREASURY TRUST FUNDBUCXX | 2.89% | 3.80% | Treasury only |
| 11 | ProShares GENIUS Money Market ETFIQMM | 2.88% | 3.79% | Treasury only |
| 12 | TREASURY TRUST FUNDBITXX | 2.87% | 3.78% | Treasury only |
| 13 | Nuveen Life Money Market FundTLMXX | 2.87% | 3.85% | Government |
| 14 | Voya Government Liquid Assets PortfolioIPLXX | 2.86% | 3.87% | Government |
| 15 | Vanguard Cash Reserves Federal Money Market FundVMRXX | 2.86% | 3.89% | Government |
Ranked by what you keep after federal and state tax, not by the yield before tax. Single filer, $120,000 of taxable income, yields the funds reported for October 29 or October 30, 2026. Each fund is shown by name, then its ticker, the short code your brokerage account shows. A ranking of past yields, not a recommendation.
Treasury only: holds only U.S. Treasury bills and notes. Treasury: Treasuries plus short loans to banks backed by Treasuries (called repo). Government: also holds debt of U.S. agencies and repo backed by it. Prime: also lends to banks and companies. Municipal: lends to states and cities, free of federal tax; a single-state municipal fund is also free of tax in its own state.
The 15 largest government and Treasury classes and the 50% test
| Fund | Passes? | Jun 30 | Sep 30 | Assets |
|---|---|---|---|---|
| Fidelity Government Money Market FundSPAXX | Yes | 61% | 67% | $427.5 billion |
| Vanguard Federal Money Market FundVMFXX | Yes | 68% | 75% | $374.1 billion |
| Fidelity Government Cash ReservesFDRXX | Yes | 58% | 64% | $244.9 billion |
| Capital Group Central Fund Series - Capital Group Central Cash FundCMQXX | Yes | 84% | 82% | $131.7 billion |
| Vanguard Treasury Money Market FundVUSXX | Yes | 100% | 100% | $117.9 billion |
| Vanguard Cash Reserves Federal Money Market FundVMRXX | Yes | 70% | 76% | $115.8 billion |
| Treasury PortfolioNTPXX | Yes | 52% | 52% | $75.6 billion |
| Schwab U.S. Treasury Money FundSNSXX | Yes | 100% | 100% | $44.7 billion |
| Fidelity Treasury Money Market FundFZFXX | Yes | 59% | 61% | $41.9 billion |
| Schwab Treasury Obligations Money FundSNOXX | No: all taxed | 37% | 36% | $35.7 billion |
| Schwab Government Money FundSNVXX | No: all taxed | 29% | 29% | $31.6 billion |
| Invesco Premier U.S. Government Money PortfolioIUGXX | No: all taxed | 34% | 47% | $24.0 billion |
| Schwab Government Money FundSWGXX | No: all taxed | 29% | 29% | $23.6 billion |
| American Funds U.S. Government Money Market FundAFAXX | Yes | 84% | 85% | $23.5 billion |
| Edward Jones Money Market FundJNSXX | No: all taxed | 45% | 44% | $22.8 billion |
Percentages: share of the fund’s money in U.S. government debt that California cannot tax (Treasuries, and debt of the Federal Home Loan Banks, Farm Credit Banks and Tennessee Valley Authority) at each quarter end of 2026, from the fund’s own reports. Below 50% at any quarter end, and the whole dividend is taxed by the state (“No: all taxed”). Above it, the part earned on that debt is state-tax-free (“Yes”).
Tax rate on the last dollar of income in California
| Taxable income | State, single | State, joint | Federal, single |
|---|---|---|---|
| $50,000 | 6.00% | 2.00% | 12.0% |
| $100,000 | 9.30% | 6.00% | 22.0% |
| $200,000 | 9.30% | 9.30% | 24.0% |
| $500,000 | 11.30% | 9.30% | 38.8% |
State rates from the published schedules for tax year 2025, federal rates from the 2026 brackets including the 3.8% net investment income tax where it applies. The calculator uses the same figures.
Questions about this page
Tap a question to see the answer.
Are money market fund dividends taxable in California?
Yes, unless they come from U.S. or California obligations held by a fund that kept at least 50% of its assets in such obligations at the close of each quarter of its tax year. Then the part of the dividend from those obligations is exempt, and you subtract it on Schedule CA (540).
Where do I find the exempt percentage for California?
In the fund company’s year-end tax information, often a table titled U.S. government obligations or state tax information. Many companies also say there whether the fund met California’s 50% requirement for the year. Use that figure, not the holdings estimate on this site, on your return.
Is a California municipal money fund better than a Treasury fund?
It depends on your brackets. On the filed yields VCTXX paid 2.10% free of both federal and California tax, while VUSXX paid 3.89% free of California tax only. The calculator above compares the two for your income; at most incomes on these yields the Treasury fund kept more.
Does California tax repo income of a money fund?
Yes. Interest on repurchase agreements is paid by the bank or dealer that borrowed, not by the United States, so it is not interest on U.S. obligations even when Treasuries are the collateral. It also does not count toward the 50% of assets the fund needs at each quarter end.
Other pages
Filings, rules and tax schedules behind this page
- California Franchise Tax Board, 2025 Schedule CA (540) instructions: funds with 50% of assets in U.S. or California obligations
- California Franchise Tax Board, 2025 California tax rate schedules
- Securities and Exchange Commission, Form N-MFP data sets (monthly, as filed)
- IRS Revenue Procedure 2025-32, 2026 tax rate tables
Compiled by Radif Partners
Independent publisher of money market fund yield and after-tax calculators built on Form N-MFP filings
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Fund data as filed for 2026, site checked on