Tax-Equivalent Yield Calculator | Rubiq Financial Partners

Your estimate

Enter your own marginal tax rates. This tool will not look up or fill in rates based on your state or income.

Municipal bond yield

Enter the bond’s annual yield, as a percentage.

State of residence

Choose your state of residence and whether the bond is in-state or out-of-state.

Where is the bond issued?

In my state

Outside my state

Many states exempt qualifying in-state municipal interest from state tax, while out-of-state interest may be taxable.

Your federal marginal tax rate

Enter your own estimate. Use a marginal rate, not your average tax rate.

Your state marginal tax rate

Enter your own estimate; the state selection does not look up or fill in a tax rate. Enter 0% if no state income tax applies.

Estimated taxable-equivalent yield

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Enter your bond yield, state, bond location, and tax rates to see an estimate.

At a glance

Municipal bond yield—

Taxable-equivalent yield—

Estimated yield advantage—

Choose your state and bond location to see the tax assumptions used.

Understanding the result

What is tax-equivalent yield?

Tax-equivalent yield estimates the taxable bond yield needed to match the after-tax income of a tax-exempt municipal bond. It can be a useful starting point when comparing yields, but it is not a complete measure of investment value or risk.

In-state municipal bond: yield ÷ (1 − federal rate) ÷ (1 − state rate) Out-of-state municipal bond: yield ÷ (1 − federal rate). This simplified comparison assumes out-of-state muni interest is taxed by your state.

The estimate uses the federal and state marginal tax rates you enter; it does not look up tax brackets or infer a rate from your state. It assumes qualifying in-state municipal interest is exempt from both federal and state income tax. Out-of-state municipal interest is assumed to be federally exempt and subject to state tax. Actual treatment depends on the issuer, your residence, and state and local rules. The estimate does not account for federal deductibility of state taxes, local income taxes, the alternative minimum tax, the 3.8% net investment income tax, or other individual circumstances.

For a more complete comparison, consider credit quality, call features, maturity, liquidity, fees, and the effect of taxes on your specific holdings. Learn more about bond investing or explore our tax planning approach.