Connecticut money market fund tax: the 50% test and the rates
Yields as filed for October 29 or October 30, 2026, holdings as of October 31, 2026, Connecticut rates for tax year 2025. Not tax or investment advice.
Example result
FDLXX after federal and Connecticut tax
2.61%
$5,213 a year kept on $7,220 of dividends
| Dividends before tax | $7,220 |
| Federal tax at 27.8% | −$2,007 |
| State tax at 6.00% $7,220 of the $7,220 is free of Connecticut tax | −$0 |
SNVXX after federal and Connecticut tax
2.40%
$4,793 a year kept on $7,240 of dividends
FDLXX leaves $420 more a year than SNVXX.
Yields reported by the funds for FDLXX October 29, 2026, SNVXX October 30, 2026; yields change daily. Estimate, not tax or investment advice. Nothing you type leaves your browser. How it is computed
Same test as California and New York, lower rates
Connecticut belongs to the small group of states that attach a threshold to the exemption for fund dividends. Its Department of Revenue Services treats the part of a fund’s dividend that comes from U.S. obligations as exempt only when the fund held at least half of its assets in such obligations at the close of each quarter. Below that line, the whole dividend is taxable. Connecticut rates are lower than California’s or New York’s, so the stakes per dollar are smaller, but balances held by Connecticut households are often large. Take a joint return at $300,000 of income with $200,000 in a money fund. Fidelity’s Treasury Only fund FDLXX, which filed 3.61% and held nothing but Treasuries, left 2.61% after tax, or $5,213 a year. Schwab Government Money Fund SNVXX, which filed 3.62% but held most of its money in repo and stayed below 50% at both quarter ends in the data, left 2.40%, or $4,793. The yields before tax were close; the result after tax was not.
Top 15 share classes after tax in Connecticut
| # | Fund | You keep (after tax) | Before tax | Type |
|---|---|---|---|---|
| 1 | North Capital Treasury Money Market FundNCGXX | 3.03% | 3.99% | Treasury only |
| 2 | Capital Group Central Fund Series - Capital Group Central Cash FundCMQXX | 2.97% | 3.96% | Government |
| 3 | Gabelli U.S Treasury Money Market FundGABXX | 2.96% | 3.90% | Treasury only |
| 4 | Money Market AccountQCMMFX | 2.96% | 3.95% | Government |
| 5 | Vanguard Treasury Money Market FundVUSXX | 2.96% | 3.89% | Treasury only |
| 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 | Vanguard Cash Reserves Federal Money Market FundVMRXX | 2.89% | 3.89% | Government |
| 11 | Voya Government Liquid Assets PortfolioIPLXX | 2.89% | 3.87% | Government |
| 12 | Nuveen Life Money Market FundTLMXX | 2.89% | 3.85% | Government |
| 13 | TREASURY TRUST FUNDBUCXX | 2.89% | 3.80% | Treasury only |
| 14 | Vanguard Federal Money Market FundVMFXX | 2.89% | 3.88% | Government |
| 15 | ProShares GENIUS Money Market ETFIQMM | 2.88% | 3.79% | Treasury only |
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 Connecticut 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 Connecticut
| Taxable income | State, single | State, joint | Federal, single |
|---|---|---|---|
| $50,000 | 4.50% | 4.50% | 12.0% |
| $100,000 | 5.50% | 4.50% | 22.0% |
| $200,000 | 6.00% | 5.50% | 24.0% |
| $500,000 | 6.90% | 6.50% | 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 Treasury money fund dividends exempt in Connecticut?
The part from U.S. obligations is exempt if the fund held at least 50% of its assets in such obligations at the close of each quarter of its tax year, under the Department of Revenue Services policy on exempt dividends. A fund holding only Treasuries, such as FDLXX, meets that easily.
What is the top Connecticut income tax rate?
The 2025 schedule tops out at 6.99%, reached at $500,000 of taxable income for a single filer and higher for joint filers. Connecticut also phases out the benefit of its lower brackets at high incomes, which this site does not model: it applies the marginal rate of the schedule.
Do Connecticut municipal money funds exist?
None appears among the retail single-state share classes in the data behind this site, which holds California, New York, Massachusetts and New Jersey funds. A national municipal fund is exempt from federal tax, but Connecticut taxes the part of its dividend from other states’ bonds.
Other pages
Filings, rules and tax schedules behind this page
- Connecticut Department of Revenue Services, Policy Statement 92(3) on exempt dividends of qualifying funds
- Connecticut General Assembly, Office of Legislative Research, report 2026-R-0057 (2025 brackets of seven states)
- 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