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Do tax-exempt bond fund earnings need to be reported on taxes?
Tax-exempt interest (and dividends attributable to tax-exempt interest) is required to be reported on Form 1040 line 8b (or the analogous line of Form 1040A).  While it is not directly taxed, it does come into play in the calculation of taxable income and various credits.  For example, tax-exempt interest is counted when determining the portion of Social Security benefits to be included in gross income.