After-Tax Yield Calculator
A headline yield says what a fund pays. It doesn't say what you keep, because qualified dividends, ordinary income, and Treasury interest are taxed at different rates. Enter two yields and their tax treatments to see both after-tax numbers side by side. Educational math only.
Your tax settings
Yield A
Yield B
Before you read the results: this is educational arithmetic, not tax or investment advice, and not a recommendation of any fund or strategy. It applies standard federal rate categories and your entered state rate to hypothetical yields. It ignores the 3.8% net investment income tax, return-of-capital classifications, fund-specific income mixes, and everything else about your tax situation. ETF BFF is not a registered investment adviser. Confirm your own numbers with a qualified tax professional.
What each yield keeps, at these settings
Yield A
After-tax yield
–
Headline yield–
Effective tax on payout–
Annual income after tax–
Yield B
After-tax yield
–
Headline yield–
Effective tax on payout–
Annual income after tax–
Free one-page worksheet
See it on your own balance: the State-Tax Worksheet
The Treasury ETF State-Tax Worksheet: a one-page calc for what the Treasury state-tax exemption saves you on your balance, plus the CA/NY/CT threshold rule.
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What the settings mean
- Qualified dividends get the 0%, 15%, or 20% federal rate plus your state rate. Most payouts from US stock funds qualify, if you hold the fund more than 60 days around the ex-dividend date. Details in how ETFs are taxed.
- Ordinary income uses your regular federal bracket plus your state rate. This covers bond fund interest and, approximately, covered call fund distributions; the exact fund-level mix varies by year, as covered in JEPI's yield after taxes.
- US Treasury interest uses your federal bracket with no state tax, because federal law exempts Treasury interest from state income tax. Background in the state-by-state breakdown and the Treasury ETF guide.
- In an IRA or 401(k), none of these differences apply while the money stays in the account; every setting here describes a taxable brokerage account.
Common questions
Why do two funds with the same yield keep different amounts after taxes?
Because the tax treatment of the payout differs by its source. Qualified dividends are taxed at 0%, 15%, or 20% federally. Ordinary income, which covers bond interest and most covered call fund distributions, is taxed at your regular bracket, up to 37%. US Treasury interest is taxed federally as ordinary income but is exempt from state income tax. The same headline yield can keep very different amounts depending on which bucket it falls into and where you live.
How is a covered call ETF's yield taxed?
Mostly as ordinary income. Funds like JEPI generate much of their distribution from option premium, which does not qualify for the lower dividend tax rates. The exact mix varies by fund and year; the fund's annual tax documents show the split. This calculator's ordinary-income setting approximates that treatment. It is an educational simplification, not tax advice.
Why is Treasury interest treated differently in this calculator?
Interest from US Treasury securities is exempt from state and local income tax under federal law, so the calculator applies your federal bracket but skips the state rate for that setting. Federal tax still applies in full. Funds holding only Treasuries, like SGOV, pass nearly all of their income through with this treatment; funds mixing Treasuries with other holdings pass through only a percentage, published in their year-end tax documents.
Is this calculator tax or investment advice?
No. It is an educational tool that applies published tax-rate categories to numbers you enter. It simplifies: it ignores the 3.8% net investment income tax, return-of-capital classifications, fund-specific income mixes, and your full tax picture. ETF BFF is not a registered investment adviser. For decisions, confirm your situation with a qualified tax professional.
Nothing on ETF BFF is personalized financial or tax advice, and this calculator makes no recommendation about any fund, yield, or strategy. Results are hypothetical arithmetic based only on the numbers you enter. Tax rates and rules change, and your actual treatment depends on facts this tool does not know. ETF BFF is not a registered investment adviser. Past performance does not guarantee future results. See our About page for full disclosures.