Line 2 – Taxable Interest

If you did not receive any of the kinds of income listed (within this line instructions), make no entry on this line in either column B or column C.

Enter in column B the interest you received from:

U.S. savings bonds (except for interest from series EE U.S. savings bonds issued after 1989 that qualified for the Education Savings Bond Program exclusion).

U.S. Treasury bills, notes, and bonds.

Any other bonds or obligations of the United States and its territories.

Interest from Ottoman Turkish Empire settlement payments.

Interest income from children under age 19 or full-time students under age 24 included on the child’s federal tax return and reported on the California tax return by the parent. For more information, get form FTB 3803, Parents’ Election to Report Child’s Interest and Dividends.

Certain mutual funds pay “exempt-interest dividends.” If the mutual fund has at least 50% of its assets invested in tax-exempt U.S. obligations and/or in California or its municipal obligations, that amount of dividend is exempt from California tax. The proportion of dividends that are tax‑exempt will be shown on your annual statement or statement issued with federal Form 1099-DIV, Dividends and Distributions. For more information, get FTB Pub. 1001.

Enter in column C the interest you identified as tax-exempt interest on your federal Form 1040 or 1040-SR, line 2a, and which you received from:

The federally exempt interest dividends from other states, or their municipal obligations and/or from mutual funds that do not meet the 50% rule as previously discussed.

Non-California state bonds.

Non-California municipal bonds issued by a county, city, town, or other local government unit.

Obligations of the District of Columbia issued after December 27, 1973.

Non-California bonds if the interest was passed through to you from S corporations, trusts, partnerships, or Limited Liability Companies (LLCs).

Interest or other earnings earned from an HSA are not treated as tax deferred. Interest or earnings in an HSA are taxable in the year earned.

Interest on any bond or other obligation issued by the Government of American Samoa.

Interest income from children under age 19 or full-time students under age 24 included on the parent’s federal tax return and reported on the California tax return by the child.

Make no entries in either column B or column C for interest you earned on Federal National Mortgage Association (Fannie Mae) Bonds, Government National Mortgage Association (Ginnie Mae) Bonds, and Federal Home Loan Mortgage Corporations (FHLMC) securities, or grants paid to low income individuals.

Get FTB Pub. 1001 if you received interest income from the items listed (within this line instructions) that is passed through to you from S corporations, trusts, estates, partnerships, or LLCs.