Mutual funds are required to provide cost basis information to shareholders and the Internal Revenue Service (IRS). You should be aware of these regulations and how they will affect the tax reporting on your taxable Harbor Funds accounts.

For more information on Cost Basis and how it may affect you, please visit the Cost Basis frequently asked questions.

Year-Ended December 31, 2023

Mutual fund dividends derived from U.S. government securities are exempt from state and local taxes. The table below shows the percentage of the ordinary dividend paid by each Harbor fund in 2023 that was derived from U.S. Treasury and certain Federal Agency obligations. If the fund you own is not listed, it does not qualify for this exemption.

* This fund meets the threshold requirements for California, Connecticut and New York, which require that at least 50% of a fund's assets at each quarter-end within the tax year consist of U.S. government obligations.

The information shown above should not be construed as specific tax, legal or investment advice. If you have questions, please consult with your tax adviser to determine the appropriate use of this information for your tax situation.

Year-Ended December 31, 2023

The following percentage of each fund's ordinary income dividend (income dividend plus short-term capital gain distribution) qualifies for the federal dividends-received deduction (DRD). To be eligible for the deduction you must be a taxable corporation. Your eligibility for this deduction could be affected by certain provisions of the Internal Revenue Code.

The information shown above should not be construed as specific tax, legal or investment advice. If you have questions, please consult with your tax adviser to determine the appropriate use of this information for your tax situation.

Year Ended December 31, 2023

Certain Harbor funds paid foreign taxes that can be passed through to shareholders. As a shareholder, you may be entitled to claim a foreign tax credit or take an itemized deduction on your federal income tax return for such amounts. Depending on your individual situation, you may be required to file Foreign Tax Credit Form 1116 (Individual, Estate or Trust) or Form 1118 (Corporation).

Shareholders completing Form 1116 are no longer required to report foreign taxes paid on a country-by-country basis; simply enter "RIC" on line i.

To calculate your total income from foreign sources paid by the fund, multiply the amount in Box 1a of your 1099-DIV by the percentage found in the column below titled "Percent of Box 1a That is Foreign Sourced Income". You may be required to adjust foreign sourced income by any foreign sourced qualified dividend income. The percent of Box 1a which is foreign sourced qualified dividend income may be found in the table titled, "Percent of Box 1a that is Foreign Sourced qualified dividend income." For more information, please see Instructions to Form 1116 and IRS Publication 514, Foreign Tax Credit for Individuals.

The information shown above should not be construed as specific tax, legal or investment advice. If you have questions, please consult with your tax adviser to determine the appropriate use of this information for your tax situation.

Year Ended December 31, 2023

The following percentage of each fund's ordinary income dividend (income dividend plus short-term capital gain distribution) is eligible for reduced tax rates as qualified dividend income (QDI) for 2023.

The information shown above should not be construed as specific tax, legal or investment advice. If you have questions, please consult with your tax adviser to determine the appropriate use of this information for your tax situation.

Year-Ended December 31, 2023

Taxable corporations or partnerships may use the following percentage of each fund's ordinary income dividend (income dividend plus short-term capital gain distribution) as business interest income for purposes of calculating certain provisions of the Internal Revenue Code.

The information shown above should not be construed as specific tax, legal or investment advice. If you have questions, please consult with your tax adviser to determine the appropriate use of this information for your tax situation.

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Harbor Scientific Alpha High-Yield ETF and Harbor Scientific Alpha Income ETF are registered with HM Revenue & Customs in the U.K. as “reporting funds”. If you are subject to UK taxation, you may need to report “excess reportable income.”

The annual UK reportable income – Report to investors  can be found below.

The annual UK Reportable Income – Report to Investors is intended for investors outside of the United States and does not constitute an offer or solicitation in any jurisdiction in which such an offer or solicitation would be unlawful under the securities law of such jurisdiction.   

Organizational actions (e.g. return of capital) affecting the basis of securities held in Harbor Funds are reported on IRS Form 8937.