In Virginia -- is Money Market incl US Govt obligations taxable?

[Greta]

Does Virginia allow deduction only for US Treasury (in money market investment), or also US Govt obligations?

[sjrcpa]

What differentiates the two?

[Greta]

Brokerage houses report separately if the source is a US Treasury bills or US Govt obligations like Fannie Mae. I was under the impression that only US Treasury source was deductible in Virginia and other states. Money market funds are made up almost entirely of US Treasures and US Govt obligations. Folks have a lot of money now in MM.

[IRonMaN]

Sounds like you are confusing money market accounts with mutual fund accounts.

[Greta]

Ah, you're right. I was confusing it with mutual funds. But if a client has a MM account (reported by Vanguard as dividends), and 66% of it is derived from US treasury bills, can't I deduct that on the state return? What about if derived from US Govt obligations?

[sjrcpa]

You can look that up in the instructions, which may refer you to other resources on their website.