Tax-Equivalent Yield Calculator

After-tax yield = entered yield × (1 − applicable marginal tax rate). The applicable rate is the sum of federal, state, local and NIIT rates that apply to that investment. No deduction benefit is assumed between taxes.

Required equivalent yield = source after-tax yield ÷ (1 − target applicable marginal tax rate). This general form works in either direction: start with a taxable bond, Treasury or qualifying municipal bond.

For example, a fully tax-exempt 3% yield is equivalent to a taxable yield of 4.1667% when the applicable tax rate is 28%: 3% ÷ 0.72. This is an illustration, not a quoted investment.

After-tax income gain = highest after-tax income − lowest after-tax income among the offers entered in Compare actual offers (per $100,000 when no amount is entered). It reflects both yield and tax differences. In Find equivalent yields every row leaves the same after-tax income by design, so no gain is shown there.

Tax saved vs. a fully taxable CD = interest × (CD applicable rate − this option's applicable rate). Interest is the amount entered × the option's yield (or $100,000 when no amount is entered). It isolates the value of each option's tax exemptions: the dollars of federal, state, local and NIIT tax the client does not pay on that interest compared with holding it in a fully taxable CD. It does not measure differences in yield; compare after-tax interest for that.

Results are calculated using unrounded values; displayed yields are rounded to three decimal places. Equal yields may appear identical after rounding. Annual income equals amount invested × after-tax yield. It does not include price changes, fees, reinvestment, or changes to tax brackets. A yield to maturity or an APY may not equal annual cash interest; dollar income is an illustration only.

Tax estimation finds the ordinary-income bracket on the next dollar at the entered taxable income. At an exact bracket boundary, the next higher bracket is used. All interest is then modeled at that marginal rate, even if a large investment would cross brackets. When taxable income is zero, remaining unused deductions are not inferred. Prefer manual rates when unused deductions, qualified dividends/capital gains, or other interactions make this approximation inappropriate.

Designed for full-year U.S. resident individuals in taxable accounts, not retirement accounts, trusts, corporations, or nonresidents. Taxable municipal bonds should be modeled as taxable bonds, not in the tax-exempt municipal categories. Municipal AMT exposure is not modeled. Treasury and government money-market funds are modeled through the fund category using the U.S. obligation share you enter. A total bond fund is modeled with an assumed 40% of income from U.S. Treasuries; an actual fund's share varies by year and is reported on its January tax letter; agency securities (FHLB, Farm Credit and similar) vary by state and are not modeled separately. Repurchase agreements held by a fund are generally not U.S. obligations for this purpose.

The federal NIIT switch assumes the full 3.8% applies to all taxable interest in this comparison. It does not calculate NIIT thresholds, partial applicability, deductions or liability. State investment-income surtaxes are not inferred from this switch.

Excludes deductions and credit phaseouts, tax-benefit recapture, most state-specific surtaxes, alternative minimum tax, Social Security taxation, Medicare premiums, bracket-crossing calculations, capital gains, market discount, original-issue-discount timing and bond premium amortization. California's 1% taxable-income surcharge, Massachusetts' 4% income surtax and Maine's 2026 2% income surcharge are included in estimated state rates. See the selected-state note for further limitations.

Municipal exemptions vary by issuer, issue date and statute. Defaults are only a starting point: Illinois, Iowa, Oklahoma and Wisconsin start with in-state interest marked state-taxable. Other states start with in-state exempt. All states, including DC under its post-2024 rules, start with out-of-state interest marked taxable unless you select an exemption. Confirm the particular security, including reciprocity and territory-issued debt. Local treatment is separate and is never looked up automatically.

Privacy: This standalone file does not send, save or track your financial inputs. CSV export saves a file only when requested. An iframe resize message contains only its display height. The Copy link button builds a URL that contains the inputs shown, including the income figures entered; share it only if you are comfortable with that. Nothing is sent anywhere until you paste it. The website hosting this file may have its own privacy practices. External source links open only when clicked.

Educational estimate only. This is not a tax return, tax advice, an investment recommendation or a guarantee of returns. Confirm tax treatment and material decisions with a qualified professional.

Annual update. This edition contains 2026 tables only. Before using it for 2027 planning, replace: the federal brackets (published each fall in an IRS Revenue Procedure), every state schedule in the tax-data block, the New York City, Yonkers and Maryland local presets, and the provisional schedules listed below once final versions publish. The NIIT thresholds are statutory and not indexed, so they change only if Congress changes them. After updating, change taxYear, reviewed and version in the data block; the banner, the footer and every client PDF read from those fields. From January 1, 2027 the banner turns red automatically until the tables are replaced.

Research review: September 7, 2026. Amended September 9, 2026 (Vermont, Oklahoma, local presets, fund category, New York bracket rates). Federal tax year: 2026. This file contains a static set of tax schedules; it does not refresh itself. Statutory rates are not necessarily effective marginal rates after all tax interactions.

Coverage exceptions: California uses the 2025 schedule referenced in its 2026 estimated-tax instructions. Arkansas and Idaho use clearly labeled 2025 schedules provisionally. Nebraska uses its August 17, 2026 draft. Oregon uses its published 2026 estimated-tax chart. Vermont uses its 2024 published schedule provisionally; rates are unchanged but thresholds are indexed annually. New York City, Yonkers and Maryland county presets are listed with their own basis year; Anne Arundel and Frederick counties use tiered rates and must be entered manually.

IRS Revenue Procedure 2025-32 — 2026 federal brackets · IRS: interest income and Treasury treatment · IRS: net investment income tax · MSRB: municipal-bond tax treatment