Tax-exempt interest dividends by state for Vanguard municipal …

Tax-exempt interest dividends by state for Vanguard municipal bond

funds and Vanguard Tax-Managed Balanced Fund

Important tax information for 2018

This tax update provides information to help you report earnings by state from any of your Vanguard municipal bond funds and Vanguard Tax-Managed Balanced Fund on your year-end tax returns. Tax-exempt interest dividends from these funds, as reported on Form 1099-DIV, Box 11, are taxed differently at the federal, state, and local levels, and may be subject to the alternative minimum tax.

Federal tax treatment. The tax-exempt interest dividends are 100% exempt from federal income tax.

State and local tax treatment. A portion of these dividends may be exempt from state and/or local tax, depending on where you file your return. On the reverse side, you'll find the percentage that was earned in each state or U.S. territory during 2018. If your state and/or local tax laws provide for the exemption, multiply the total income distribution shown on Form 1099-DIV, Box 11, by the appropriate percentage. This amount can be excluded, and the remaining balance should be reported on your tax return.

The tax-exempt interest dividends earned from obligations issued by U.S. territories are generally exempt from state income tax. Therefore, you may be able to add the "Outside the United States" percentages shown at the bottom of the table to your state-exempt percentage for a total exempt amount. Consult a tax advisor for more information.

Alternative minimum tax. Tax-exempt interest dividends from these funds may be subject to the federal alternative minimum tax. For further information, refer to "Your Vanguard tax-exempt investments and AMT" (visit taxcenter, select State-specific tax information, and choose Fund-specific tax information).

Do you invest in a Vanguard state-specific municipal bond fund? If so, investment income you've received may not be subject to state income tax. In addition to being 100% exempt from federal income taxes, interest dividends from Vanguard state-specific municipal bond funds (listed below) are 100% exempt from state taxes to resident shareholders of that state. For example, if you reside in California and own shares of Vanguard California Municipal Money Market Fund, the income reported on Form 1099-DIV, Box 11, is 100% exempt from California state income tax. Note that tax-exempt income from a state-specific municipal bond fund may be subject to state-imposed alternative minimum tax requirements, depending on the state tax laws that apply to you.

Funds Vanguard California Municipal Money Market Fund Vanguard California Intermediate-Term Tax-Exempt Fund Vanguard California Long-Term Tax-Exempt Fund Vanguard Massachusetts Tax-Exempt Fund Vanguard New Jersey Municipal Money Market Fund Vanguard New Jersey Long-Term Tax-Exempt Fund Vanguard New York Municipal Money Market Fund Vanguard New York Long-Term Tax-Exempt Fund Vanguard Ohio Long-Term Tax-Exempt Fund Vanguard Pennsylvania Municipal Money Market Fund Vanguard Pennsylvania Long-Term Tax-Exempt Fund

Questions? Call us at 877-662-7447 Monday through Friday from 8 a.m. to 10 p.m., Eastern time. Our investment professionals can't provide tax advice; consult a qualified tax professional if your tax situation is complex or if you're uncertain about a specific IRS rule. You can also find a variety of general tax-preparation data and tools at taxcenter.

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Tax-exempt interest dividends by state for 2018

State Alabama Alaska Arizona Arkansas California

Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota* Mississippi Missouri

Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

Municipal Money Market Fund

1.45% 0.09 1.05 0.00 1.83

2.84 0.35 0.08 1.37 3.94 1.93 0.58 0.37 5.08 0.76 0.28 0.32 0.32 1.00 0.03 2.22 3.17 2.10 0.54 0.35 0.94

0.00 1.46 2.48 0.12 4.21 0.58 13.21 0.94 0.01 3.22 0.05 1.47 1.31 0.05 1.40 0.01 4.47 12.11 0.13 0.00 0.98 2.51 0.66 4.04 0.11

Limited-Term

Short-Term Tax- Tax-Exempt

Exempt Fund Fund

1.67%

2.15%

0.21

0.39

1.15

1.55

0.02

0.35

5.80

7.44

1.68

1.16

2.01

2.05

0.21

0.20

0.27

0.20

2.99

3.50

3.53

3.00

0.75

0.95

0.09

0.10

9.92

9.13

0.83

1.11

0.35

0.50

0.20

0.50

0.52

1.14

0.54

1.22

0.03

0.14

4.79

2.89

2.86

2.83

1.78

2.26

0.75

0.83

0.38

0.42

0.60

0.70

0.02

0.16

0.57

0.76

0.63

0.37

0.15

0.14

5.35

6.06

1.04

0.98

14.47

12.41

1.20

1.09

0.05

0.04

2.68

3.77

0.34

0.28

0.90

0.35

4.95

5.94

0.11

0.45

0.61

1.16

0.04

0.11

1.63

1.95

13.29

10.87

0.30

0.19

0.03

0.02

1.67

1.56

2.31

2.01

0.31

0.32

0.92

1.09

0.02

0.03

IntermediateTerm TaxExempt Fund

1.08% 0.14 2.02 0.25 11.92

1.72 1.13 0.08 0.35 5.35 2.64 0.97 0.11 7.69 1.40 0.34 0.63 0.92 0.88 0.08 2.26 2.67 3.16 0.99 0.40 0.95

0.06 0.47 0.83 0.11 4.20 0.18 15.41 0.93 0.04 2.91 0.33 0.76 5.02 0.29 0.97 0.13 0.77 8.93 0.37 0.09 1.80 3.17 0.50 1.33 0.02

Outside the United States

American Samoa

0.00%

Guam

0.00

Northern Mariana Islands

0.00

Puerto Rico

0.00

Virgin Islands

0.00

0.00% 0.03 0.00

0.16 0.02

0.00% 0.13 0.00

0.53 0.04

0.00% 0.16 0.00

0.20 0.00

Long-Term TaxExempt Fund

1.37% 0.16 0.81 0.07 15.52

1.54 0.34 0.19 0.78 5.54 2.13 1.13 0.23 9.00 1.63 0.49 0.40 0.83 0.65 0.14 1.84 1.86 2.84 0.91 0.46 1.23

0.16 0.39 0.43 0.28 3.46 0.51 14.05 0.95 0.09 3.10 0.26 0.99 5.46 0.21 1.73 0.22 1.16 8.47 0.51 0.00 1.64 1.61 0.71 1.78 0.00

High-Yield TaxExempt Fund

1.09% 0.14 0.77 0.12 11.20

2.31 0.71 0.03 1.05 6.41 1.48 0.62 0.22 11.41 1.75 0.65 0.67 0.74 1.45 0.15 1.23 1.75 3.60 0.65 0.30 1.36

0.00 0.32 0.18 0.29 7.52 0.07 8.66 0.70 0.13 2.50 0.75 0.54 6.74 0.56 1.47 0.24 0.84 7.91 0.77 0.29 2.11 1.64 0.46 3.06 0.00

Tax-Managed Balanced Fund

1.00% 0.15 2.46 0.38 12.17

1.64 0.91 0.18 0.56 5.12 2.48 1.47 0.04 6.96 1.43 0.36 0.60 1.12 0.54 0.07 2.57 2.35 2.73 1.03 0.74 0.81

0.05 0.51 1.26 0.00 3.69 0.37 14.11 0.81 0.06 2.94 0.46 0.38 5.56 0.11 1.08 0.32 1.56 9.67 0.60 0.00 2.05 2.17 0.51 1.56 0.08

Tax-Exempt Bond Index Fund

0.77% 0.07 1.36 0.06 14.62

1.39 1.68 0.11 1.26 4.06 1.88 0.94 0.03 6.43 0.40 0.20 0.40 0.58 0.63 0.05 2.31 4.64 1.40 0.53 0.33 0.28

0.00 0.24 1.16 0.07 7.93 0.08 19.75 0.94 0.00 1.50 0.31 0.46 4.49 0.08 1.22 0.00 0.37 10.22 0.42 0.03 1.26 3.10 0.04 0.90 0.01

0.00% 0.11 0.00

0.00 0.00

0.07% 0.30 0.00

0.24 0.15

0.00% 0.26 0.00

0.14 0.00

0.00% 0.00 0.00

0.00 0.00

Notes: ? The information provided above applies to all share classes of a fund. ? The percentage of assets that each of the Vanguard municipal bond funds and Vanguard Tax-Managed Balanced Fund have invested in each state and

U.S. territory at the end of 2018 can be found at taxcenter under State-specific tax information.

*M innesota requires that 95% of the tax-exempt interest dividends be derived from Minnesota source obligations in order for the income to be exempt from state tax. None of the funds met this criterion for 2018. Therefore, all tax-exempt interest dividends from these funds are subject to Minnesota state income tax.

? 2019 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor.

INBST 012019

Assets by state for Vanguard municipal bond funds and Vanguard Tax-Managed Balanced Fund

Important tax information for 2018

State and local governments may require residents to pay intangible or personal property tax on investments. The following tables provide the percentage of assets that each of the Vanguard municipal bond funds and Vanguard Tax-Managed Balanced Fund had invested in each state and U.S. territory at the end of 2018. This information will help you determine any state and local intangible or personal property tax liability generated by your individual holdings if required by your state or locality for 2018.

Contact your state and local tax offices to find out if the taxes apply to your individual situation.

Assets by state as of December 31, 2018

State

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts

Municipal Money Market Fund

1.58% 0.19 0.95 0.00 1.83 2.90 0.30 0.14 1.48 4.72 2.20 0.45 0.15 5.64 0.90 0.36 0.35 0.52 1.21 0.05 2.33 4.49

Short-Term Tax-Exempt Fund

2.05% 0.32 1.11 0.01 6.19 1.88 2.35 0.37 0.38 3.24 3.49 0.75 0.08 8.32 0.81 0.86 0.21 0.91 0.43 0.06 4.50 2.94

Limited-Term Tax-Exempt Fund

2.00% 0.38 1.64 0.35 7.42 1.05 2.56 0.19 0.16 3.34 2.77 0.84 0.12 6.95 1.21 0.31 0.50 1.52 1.30 0.15 2.86 2.74

IntermediateTerm Tax-Exempt Fund

1.33% 0.13 2.10 0.28 10.61 1.66 1.32 0.11 0.49 5.13 2.94 1.17 0.08 6.36 1.27 0.25 0.68 1.30 0.87 0.10 3.22 2.72

Long-Term Tax-Exempt Fund

1.24% 0.16 1.07 0.09 13.99 1.59 0.36 0.23 0.76 4.70 2.28 1.17 0.28 7.36 1.55 0.42 0.45 0.86 0.78 0.18 2.79 2.32

High-Yield Tax-Exempt Fund

1.02% 0.15 0.71 0.09 10.39 2.74 0.84 0.03 1.09 6.89 1.33 0.62 0.21 10.63 1.57 0.52 0.57 0.86 1.38 0.20 1.47 2.24

Tax-Managed Balanced Fund

0.59% 0.09 1.29 0.22 5.29 0.89 0.57 0.09 0.21 2.65 1.38 0.78 0.04 3.01 0.76 0.15 0.34 0.71 0.28 0.04 1.65 1.13

Tax-Exempt Bond Index Fund

0.60% 0.05 1.74 0.05 14.25 1.46 1.57 0.10 1.16 3.61 1.81 1.10 0.02 4.99 0.40 0.19 0.34 0.81 0.50 0.04 3.15 4.98

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State

Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

Municipal Money Market Fund

3.08% 0.36 0.22 1.36 0.00 1.62 2.61 0.05 2.29 0.58 15.79 1.13 0.05 4.00 0.05 0.91 1.19 0.08 2.36 0.03 3.17 16.88 0.31 0.00 1.01 2.59 0.72 4.84 0.11

Short-Term Tax-Exempt Fund

1.86% 0.80 0.24 0.43 0.03 0.53 0.74 0.18 3.74 0.87 15.86 1.45 0.04 2.73 0.30 0.72 5.09 0.07 0.62 0.04 1.52 14.84 0.35 0.03 1.76 2.53 0.32 1.26 0.03

Limited-Term Tax-Exempt Fund

2.48% 1.03 0.41 0.55 0.16 0.88 0.56 0.12 4.40 1.34 13.35 1.31 0.02 3.86 0.35 0.29 6.17 0.45 1.29 0.09 1.77 13.33 0.18 0.02 1.40 2.37 0.31 1.00 0.02

Outside the United States American Samoa Guam Northern Mariana Islands Puerto Rico Virgin Islands

0.00% 0.00 0.00 0.00 0.00

0.00% 0.02 0.00 0.08 0.02

0.00% 0.10 0.00 0.28 0.02

Note: The information provided in the tables applies to all share classes of a fund.

IntermediateTerm Tax-Exempt Fund

3.01% 1.03 0.40 0.95 0.07 0.72 0.90 0.08 3.35 0.26 15.47 0.90 0.03 3.11 0.40 0.83 5.17 0.22 0.98 0.14 0.88 8.99 0.37 0.07 2.08 3.38 0.55 1.34 0.01

0.00% 0.14 0.00 0.13 0.00

Long-Term Tax-Exempt Fund

2.91% 1.25 0.27 1.39 0.19 0.55 0.81 0.21 3.30 0.51 14.38 1.26 0.08 3.68 0.42 1.08 5.51 0.19 1.77 0.22 1.17 8.56 0.51 0.00 1.52 1.42 0.65 1.72 0.00

0.00% 0.12 0.00 0.00 0.00

High-Yield Tax-Exempt Fund

3.74% 0.50 0.27 1.28 0.00 0.44 0.15 0.27 7.24 0.04 9.57 0.76 0.14 2.40 0.87 0.55 6.83 0.69 1.81 0.32 0.93 7.26 1.04 0.28 2.05 1.62 0.54 2.54 0.00

0.00% 0.28 0.00 0.34 0.15

Tax-Managed Balanced Fund

1.45% 0.61 0.19 0.38 0.02 0.32 0.70 0.00 1.63 0.25 6.79 0.36 0.03 1.59 0.25 0.21 2.71 0.06 0.54 0.13 1.13 5.81 0.34 0.00 1.19 1.20 0.32 0.86 0.03

Tax-Exempt Bond Index Fund

1.70% 0.91 0.30 0.23 0.00 0.21 1.38 0.05 6.04 0.11 20.41 1.26 0.00 1.54 0.33 0.52 4.38 0.09 0.89 0.00 0.35 10.97 0.47 0.01 1.37 3.37 0.03 1.07 0.01

0.00% 0.08 0.00 0.05 0.00

0.00% 0.00 0.00 0.00 0.00

Questions?

You can find a variety of tax-preparation data and tools anytime at taxes. Or you can call us at 877-662-7447 Monday through Friday from 8 a.m. to 10 p.m., Eastern time. Our investment professionals can't provide tax advice. Please consult a qualified tax professional if your tax situation is complex or if you're uncertain about the interpretation of a specific tax regulation.

? 2019 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor.

ASBST 012019

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