After-Tax Yield Calculator
What a savings or CD rate keeps after federal and state income tax, and whether a Treasury bill, which is free of state tax, keeps more.
The Treasury yield that keeps as much as a 4.50% savings APY, by state income tax (22% federal bracket)
| State income tax | Savings keeps | Matching T-bill yield |
|---|---|---|
| No state income tax | 3.51% | 4.50% |
| 3% | 3.38% | 4.33% |
| 5% | 3.29% | 4.21% |
| 7% | 3.19% | 4.10% |
| 9.3% | 3.09% | 3.96% |
| 13.3%, California's top rate | 2.91% | 3.73% |
What a 4.50% APY keeps after tax, by federal bracket and state tax
| Federal bracket | No state tax | 5% state tax | 9.3% state tax |
|---|---|---|---|
| 10% | 4.05% | 3.82% | 3.63% |
| 12% | 3.96% | 3.73% | 3.54% |
| 22% | 3.51% | 3.29% | 3.09% |
| 24% | 3.42% | 3.19% | 3.00% |
| 32% | 3.06% | 2.83% | 2.64% |
| 35% | 2.93% | 2.70% | 2.51% |
How this calculator works
Savings, money market and CD interest is taxed by the federal government and by your state (and a few cities). After-tax yield = APY × (1 − federal rate − state rate).
Interest on Treasury bills, notes and bonds is taxed federally but exempt from state and local income tax by law (31 U.S.C. 3124). After-tax yield = T-bill yield × (1 − federal rate).
The matching Treasury yield is the savings account's after-tax yield divided by (1 − federal rate): below it, the savings account keeps more.
What it assumes
- Your marginal rates apply to all the interest. Use the bracket your last dollar of income falls in.
- It ignores the state income tax deduction on your federal return, which matters only if you itemise and are under the SALT cap.
- Enter the T-bill's investment rate (bond-equivalent yield). TreasuryDirect also shows a discount rate, which is lower.
Questions people ask
Are Treasury bills exempt from state tax?
Yes. Interest on Treasury bills, notes, bonds and savings bonds is exempt from state and local income tax, though federal tax applies (31 U.S.C. 3124).
Is a T-bill or a CD better after tax?
It depends on your state tax. At 5% state tax and a 22% bracket, a 4.50% CD keeps 3.29%, the same as a T-bill paying 4.21%. With no state income tax, compare the rates directly.
Are CDs taxed like savings accounts?
Yes. CD interest is ordinary income, federal and state, taxed in the year it is credited, even if the CD hasn't matured.
Do Treasury money market funds avoid state tax?
Partly. The share of a fund's income from Treasuries is usually exempt from state tax, but a few states, including California, New York and Connecticut, exempt it only when the fund holds at least 50% in US government securities. The fund publishes the share each year.
Which states don't tax interest income?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Washington taxes only capital gains, and New Hampshire's tax on interest and dividends ended after 2024. In those states a savings account and a T-bill are taxed alike, federally only.
What tax bracket should I use?
Your marginal bracket: the rate on your next dollar of income. Interest is added on top of your other income, so it is taxed at that rate.
After-tax yield by state
Each state's page uses its own 2026 brackets. Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming don't tax interest: there, compare rates directly.
- Alabama
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- Utah
- Vermont
- Virginia
- West Virginia
- Wisconsin
- Washington, DC
Terms explained
Related calculators
Sources
- 31 U.S.C. 3124: exemption of US obligations from state and local tax
- TreasuryDirect: Treasury bills
- IRS: Topic 403, Interest received
Updated by the RateHerald team. The maths is tested against worked examples; report a problem.