VMFXX vs VUSXX after federal and state tax
Vanguard Federal against Vanguard Treasury, 7-day yields as filed for October 30, 2026. Not 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 |
VMFXX after federal and California tax
2.85%
$1,427 a year kept on $1,940 of dividends
VUSXX leaves $51 more a year than VMFXX.
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
Same family, different tax
Vanguard Federal and Vanguard Treasury are run by the same team and pay within a few hundredths of a point of each other: 3.88% and 3.89% on the last filed day, a gap of 1 basis points (hundredths of a percentage point) in favor of the Treasury fund. The difference that matters is underneath. VUSXX holds Treasury bills and notes and nothing else, so its whole dividend is interest on U.S. obligations, which states may not tax. VMFXX holds Treasuries too, but also debt of the Federal Home Loan Banks and Farm Credit Banks, which is exempt as well, and a large block of repurchase agreements, which is not. For a single Californian at $120,000 of income that leaves 2.85% for VMFXX against 2.96% for VUSXX, or $52 a year on $50,000. In Texas, with no state tax, the figures are 2.95% and 2.96%.
The holdings estimate overstates VMFXX’s exempt share. Vanguard’s letter for 2024 put the share of VMFXX dividends from U.S. government obligations at 59.87%, while the October holdings suggest about 74%. The year-end letter is the figure that goes on a state return; the calculator accepts it under “Have the fund’s year-end tax statement?”, and entering 59.87 widens the gap in favor of VUSXX.
VMFXX and VUSXX side by side
| VMFXX | VUSXX | |
|---|---|---|
| Type | Government | Treasury only |
| 7-day net yield as filed | 3.88% | 3.89% |
| Gross 7-day yield of the fund | 3.99% | 3.96% |
| Expenses taken from the yield (expense drag) | 0.11% | 0.07% |
| State-tax-free part (U.S. government debt), last month end | 73.5% | 100.0% |
| U.S. government debt, June 30, 2026 | 67.9% | 100.0% |
| U.S. government debt, September 30, 2026 | 75.4% | 100.0% |
| Average days until holdings repay or reset their rate (weighted average maturity) | 25 days | 31 days |
| Average days until holdings are paid back in full (weighted average life) | 50 days | 54 days |
| Assets in the share class | $374.1 billion | $117.9 billion |
| Minimum initial investment on file | $3,000 | $3,000 |
| After tax, California | 2.85% | 2.96% |
| After tax, New York (outside NYC) | 2.89% | 2.96% |
| After tax, Texas | 2.95% | 2.96% |
The after-tax rows use one fixed example, the same in every side-by-side table on this site: a single filer with $120,000 of taxable income, and this site’s estimate of the state-tax-free part. Your own figures go in the calculator above.
Questions about this page
Tap a question to see the answer.
Should I switch from VMFXX to VUSXX?
That is your decision; this site gives no advice. The arithmetic: on the filed yields the two were 1 basis points apart, and VUSXX’s dividend escapes state tax entirely while about 26% of VMFXX’s holdings earn taxable income. In a state with income tax the difference usually favors VUSXX; in Texas it is a wash.
Can VUSXX be the settlement fund of a Vanguard account?
Vanguard brokerage accounts use Vanguard Federal (VMFXX) as the settlement fund. VUSXX can be bought and sold like any other fund in the account, but cash from trades lands in the settlement fund first, so holding VUSXX means moving money by hand or by a standing instruction.
Why does VMFXX have repo if it is a federal fund?
Repurchase agreements backed by Treasuries count as government securities under rule 2a-7 and give the fund daily cash. VMFXX held 26% in Treasury repo at the end of the reported month. Their interest is paid by the bank that borrowed, so states tax it.
Other pages
Filings, rules and tax schedules behind this page
- Securities and Exchange Commission, Form N-MFP data sets (monthly, as filed)
- California Franchise Tax Board, 2025 Schedule CA (540) instructions: funds with 50% of assets in U.S. or California obligations
- New York State Department of Taxation and Finance, 2025 Form IT-201 instructions (line 28, rate schedules)
- New Jersey Division of Taxation, GIT-5 Exempt Obligations (January 2026)
- 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
Checked on · Editorial policy · Contact
Fund data as filed for 2026, site checked on