Illinois money market fund tax: 4.95% and the U.S. obligation share
Yields as filed for October 29 or October 30, 2026, holdings as of October 31, 2026, Illinois rate for tax year 2025. Not tax or investment advice.
Example result
VMFXX after federal and Illinois tax
2.98%
$2,232 a year kept on $2,910 of dividends
| Dividends before tax | $2,910 |
| Federal tax at 22.0% | −$640 |
| State tax at 4.95% $2,139 of the $2,910 is free of Illinois tax | −$38 |
SPRXX after federal and Illinois tax
2.68%
$2,007 a year kept on $2,730 of dividends
VMFXX leaves $225 more a year than SPRXX.
Yields reported by the funds for VMFXX October 30, 2026, SPRXX October 29, 2026; yields change daily. Estimate, not tax or investment advice. Nothing you type leaves your browser. How it is computed
A flat rate, a proportional exemption, and repo taxed
Illinois applies its flat 4.95% individual income tax to money market fund dividends and lets residents subtract the part that comes from obligations of the United States. Publication 101 of the Department of Revenue, which lists the federal obligations whose interest Illinois exempts, is explicit about the trap in money funds: income from repurchase agreements is not exempt, whatever the collateral. That matters because many government and Treasury funds hold a large share of repo. There is no 50% test, so every fund passes its exempt share through, large or small. For a joint return at $180,000 with $75,000 in cash, Vanguard Federal (VMFXX), which filed 3.88% and held about 74% of its portfolio in exempt obligations, left 2.98% after Illinois and federal tax. Fidelity’s prime fund SPRXX, which filed 3.64% with about 9% of its holdings in exempt obligations, left 2.68%. The $225 a year between them comes from both the yield gap and the state exemption; the calculator lets you replace the holdings estimate with the percentage from the fund’s year-end letter.
Top 15 share classes after tax in Illinois
| # | 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 | 2.98% | 3.96% | Government |
| 3 | Money Market AccountQCMMFX | 2.97% | 3.95% | Government |
| 4 | Gabelli U.S Treasury Money Market FundGABXX | 2.96% | 3.90% | Treasury only |
| 5 | Fidelity Flex Government Money Market FundFLGXX | 2.96% | 4.04% | Government |
| 6 | Goldman Sachs Central Government FundGCCXX | 2.96% | 4.03% | Government |
| 7 | Fidelity Series Government Money Market FundFGNXX | 2.96% | 4.01% | Government |
| 8 | Vanguard Treasury Money Market FundVUSXX | 2.96% | 3.89% | Treasury only |
| 9 | Treasury Instruments PortfolioNPYXX | 2.93% | 3.86% | Treasury only |
| 10 | JPMorgan 100% U.S. Treasury Securities Money Market ETFJMMF | 2.93% | 3.86% | Treasury only |
| 11 | T. Rowe Price U.S. Treasury Money FundTRZXX | 2.92% | 3.99% | Treasury |
| 12 | NYLIM U.S. Government Liquidity FundMUSXX | 2.92% | 3.84% | Treasury only |
| 13 | U.S. Government Money Market FundAGJXX | 2.92% | 3.96% | Government |
| 14 | Transamerica Government Money MarketTGTXX | 2.91% | 3.94% | Government |
| 15 | Vanguard Cash Reserves Federal Money Market FundVMRXX | 2.90% | 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.
Tax rate on the last dollar of income in Illinois
| Taxable income | State, single | State, joint | Federal, single |
|---|---|---|---|
| $50,000 | 4.95% | 4.95% | 12.0% |
| $100,000 | 4.95% | 4.95% | 22.0% |
| $200,000 | 4.95% | 4.95% | 24.0% |
| $500,000 | 4.95% | 4.95% | 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.
Can I subtract Treasury fund dividends on an Illinois return?
Yes, the part of a fund’s dividends that comes from U.S. Treasury obligations and other exempt federal obligations, following Illinois Publication 101. The fund’s year-end letter gives the percentage. Income from repurchase agreements is not subtracted, even when Treasuries are the collateral.
Does Illinois tax municipal money fund dividends?
Illinois generally taxes interest on state and local bonds, including most Illinois bonds, unless a specific law exempts them. For a national municipal money fund that means the dividend is free of federal tax but mostly taxable in Illinois; the calculator treats it as fully taxable by the state.
How much does the Illinois exemption add to a Treasury fund?
At 4.95%, on a fund paying 3.57% with about 60% of its holdings in Treasuries, the exemption adds roughly 0.106% of yield. On a fund holding only Treasuries, nearly 4.95% of the dividend is saved. Use the percentage in the fund’s year-end letter for the exact figure.
Other pages
Filings, rules and tax schedules behind this page
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