After-Tax Yield Calculator

What's your real take-home income from each ETF?

SCHD
Schwab US Dividend Equity ETF
Dividend Growth
Gross Income$340/yr
Qualified Dividends (95%)
$323-$48
Ordinary Income (3%)
$10-$2
Long-Term Cap Gains (2%)
$7-$1
Federal Tax-$52
Net After-Tax Income$288/yr
Effective after-tax yield: 2.88%Effective tax rate: 15.21%
JEPI
JPMorgan Equity Premium Income ETF
Covered Call
Gross Income$750/yr
Qualified Dividends (25%)
$188-$28
Ordinary Income (55%)
$413-$91
Return of Capital (10%)
$75$0
Short-Term Cap Gains (10%)
$75-$17
Federal Tax-$135
Net After-Tax Income$615/yr
Effective after-tax yield: 6.15%Effective tax rate: 18.05%

Gross vs. After-Tax Income

Highest after-tax yield: JEPI (6.15%) > SCHD (2.88%)

On a $10,000 investment, JEPI pays $326 more after taxes than SCHD

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Return of capital is not taxed when received but reduces your cost basis. When you sell, your capital gain will be higher by the total ROC received. This calculator shows the current-year tax impact only.

FAQ

What is after-tax dividend yield?

After-tax yield is the dividend yield you actually keep after federal and state taxes. A 4% pre-tax yield can become 2.5 to 3.5% after taxes depending on your bracket and whether the dividends are qualified.

How is after-tax yield calculated?

Take the pre-tax yield, multiply the qualified portion by (1 minus the qualified dividend tax rate), multiply the non-qualified portion by (1 minus your ordinary income rate), then add state tax impact. The calculator does this automatically for each ETF based on its dividend mix.

What's the difference between qualified and non-qualified dividends?

Qualified dividends are taxed at the lower long-term capital gains rate (0, 15, or 20 percent). Non-qualified dividends (including most covered call income) are taxed at your ordinary income rate, which is usually higher.

Do covered call ETFs like JEPI have worse tax treatment?

Usually yes. A significant portion of the income from covered call ETFs (JEPI, JEPQ, QYLD, XYLD) is from option premiums, which is treated as ordinary income or short-term capital gains. That can cut the effective yield meaningfully for high-bracket investors.

Does holding ETFs in an IRA or Roth change the math?

Yes. Dividends inside a Traditional IRA or 401(k) grow tax-deferred; dividends inside a Roth IRA grow tax-free. The after-tax yield calculator is most useful for taxable brokerage accounts.

This tool is for educational and informational purposes only. It does not constitute financial advice. Past performance does not guarantee future results. Consult a qualified financial advisor for personalized advice.