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All or a portion of your ordinary income dividend from a mutual fund may be taxed at a rate of 15% (0% for investors in the 15% or 10% tax bracket) rather than the higher marginal rates applicable to ordinary income. The amount of your dividend subject to this lower rate is reported in Box 1b of your Form 1099-DIV mailed in January 2010. The tax forms for the T. Rowe Price Real Estate, Global Real Estate, and Small-Cap Value Funds will mail in February.

The tables below report the percentage of the ordinary dividend paid by the T. Rowe Price funds that qualify for the lower dividend rate. The data is provided here for informational purposes only and to assist you in your tax planning. In preparing your tax return, please use the amount in Box 1b of your Form 1099-DIV.

To treat a dividend as qualifying for lower rates, you must have held your shares on which you received the dividend for at least 61 days during the 121-day period beginning 60 days before the ex-dividend date of the distribution. You may find your fund’s ex-dividend date here.

In addition, the ordinary dividend of a mutual fund (the amount included in Box 1a of Form 1099-DIV) includes net short-term capital gains and foreign taxes paid, which may not qualify for the lower rates. As a result, the percentage of the Box 1a amount that qualifies for the lower tax rate can vary widely from year to year, depending on the amount of short-term gains and foreign taxes reported by the fund.

If you own a fund that has more than one distribution during the year, the amount reported in Box 1b of your Form 1099-DIV will be based on the qualifying percentage for each distribution.

Calculations based on the percentages below may yield amounts that differ from the amounts on your Form 1099-DIV due to rounding.

Qualified Dividend Income Percentage Tables
T. Rowe Price Domestic Stock Funds
  Qualified Dividend Income Percentage1
Balanced (All Quarters)   51%
Blue Chip Growth 100%
Capital Appreciation 66%
Capital Opportunity 100%
Diversified Mid-Cap Growth N/A
Diversified Small-Cap Growth N/A
Dividend Growth (All Quarters) 100%
Equity Income (All Quarters) 100%
Equity Index 500 (All Quarters) 100%
Extended Equity Market Index 88%
Financial Services 89%
Growth & Income (All Quarters) 100%
Growth Stock 100%
Health Sciences N/A
Media & Telecommunications 31%
Mid-Cap Growth 100%
Mid-Cap Value 100%
New America Growth N/A
New Era 100%
New Horizons 100%
Personal Strategy Balanced (All Quarters) 49%
Personal Strategy Growth 82%
Personal Strategy Income (All Quarters) 28%
Real Estate (All Quarters) 1%
Science & Technology N/A
Small-Cap Stock 100%
Small-Cap Value 78%
Tax-Efficient Balanced2 100%
Tax-Efficient Equity3 N/A
Tax-Efficient Growth4 100%
Total Equity Market Index 98%
U.S. Large-Cap Core 71%
Value 100%
T. Rowe Price Taxable Bond Funds
  Qualified Dividend Income Percentage1
Corporate Income
Emerging Markets Bond
GNMA
High Yield 1%
Inflation Protected Bond
International Bond
New Income
Prime Reserve
Short-Term Bond
Strategic Income 1%
Summit Cash Reserves
Summit GNMA
U.S. Bond Index
U.S. Treasury Intermediate
U.S. Treasury Long-Term
U.S. Treasury Money
T. Rowe Price International Stock Funds
  Qualified Dividend Income Percentage1
Africa & Middle East 11%
Emerging Europe & Mediterranean 100%
Emerging Markets Stock 100%
European Stock 100%
Global Large-Cap Stock 11%
Global Real Estate (All Quarters) 17%
Global Stock 100%
Global Technology N/A
International Discovery 58%
International Equity Index 74%
International Growth & Income 75%
International Stock 100%
Japan 100%
Latin America 100%
New Asia 72%
Overseas Stock 100%
T. Rowe Price Retirement and Spectrum Funds
  Qualified Dividend Income Percentage1
Retirement 2005 26%
Retirement 2010 31%
Retirement 2015 39%
Retirement 2020 46%
Retirement 2025 54%
Retirement 2030 65%
Retirement 2035 74%
Retirement 2040 76%
Retirement 2045 75%
Retirement 2050 77%
Retirement 2055 73%
Retirement Income 24%
Spectrum Growth 96%
Spectrum  Income 7%
Spectrum International 85%
T. Rowe Price Institutional Funds
  Qualified Dividend Income Percentage1
Institutional Africa & Middle East 23%
Institutional Core Plus
Institutional Emerging Markets Bond
Institutional Emerging Markets Equity 99%
Institutional Floating Rate
Institutional Foreign Equity 100%
Institutional Global Equity 100%
Institutional Global Large-Cap Equity 9%
Institutional High Yield 1%
Institutional International Bond
Institutional Large-Cap Core Growth 100%
Institutional Large-Cap Growth 100%
Institutional Large-Cap Value 100%
Institutional Mid-Cap Equity Growth N/A
Institutional Small-Cap Stock 100%
Institutional U.S. Structured Research 100%
T. Rowe Price Variable Annuity Portfolios
  Qualified Dividend Income Percentage1
Blue Chip Growth Portfolio N/A
Equity Income Portfolio (All Quarters) 100%
Equity Index 500 Portfolio (All Quarters) 100%
Health Sciences Portfolio N/A
International Stock Portfolio 100%
Limited-Term Bond Portfolio
Mid-Cap Growth Portfolio N/A
New America Growth Portfolio N/A
Personal Strategy Balanced Portfolio (All Quarters) 49%
Prime Reserve Portfolio

1This percentage applies to the sum of your ordinary dividend paid for the calendar year or other period, if indicated, as reported in Box 1a of your IRS Form 1099-DIV.

2Percentage only applies to the $0.03 taxable income dividend paid in August 2009. The fund merged into Balanced Fund on August 31, 2009.

3Formerly Tax-Efficient Multi-Cap Growth Fund.

4Percentage only applies to the $0.011 dividend paid in August 2009. The fund merged into Tax-Efficient Equity Fund on August 31, 2009.

Percentages are the same for all fund classes (Investor, Advisor, R, and II)

N/A indicates that a fund did not pay an ordinary dividend in 2009.

A dash indicates that the fund paid an ordinary dividend in 2009, but it was not qualified dividend income.

Copyright 2010, T. Rowe Price Investment Services, Inc., Distributor. All rights reserved.