are exempt dividends exempt from amt
DEFINITION of 'Exempt-Interest Dividend'. A distribution from a mutual fund that is not subject to income tax. Exempt-interest dividends are often associated with mutual funds that invest in municipal bonds.While exempt-interest dividends are not subject to federal income tax, they may still be subject to state income tax or the Alternative Minimum Tax (AMT).The dividend income must be reported on the income tax return, and it is reported by mutual funds on Form 1099-INT.EFINITION of 'Exempt-Interest Dividend'. A distribution from a mutual fund that is not subject to income tax. Exempt-interest dividends are often associated with mutual funds that invest in municipal bonds.