Dividend tax treatment · 2026
SPYI NEOS S&P 500 High Income ETF
SPYI pays ordinary (non-qualified) dividends — taxed at your full federal income tax rate.
What SPYI's tax treatment means in dollars
At the current 0.50% yield on $10,000 invested, SPYI generates approximately $50.00 in annual dividends.
| Scenario | Tax owed | After-tax income |
|---|---|---|
| Qualified rate (15% — most investors) | $11.00 | $39.00 |
| Ordinary income rate (22% bracket) | $11.00 | $39.00 |
After-tax income by federal bracket — $10,000 invested
The table shows your estimated after-tax dividend income at each federal bracket, under both qualified and ordinary treatment. SPYI's actual treatment is highlighted.
| Federal bracket | Qualified after-tax | Ordinary after-tax | Tax savings (qualified) |
|---|---|---|---|
| 10% | $50.00 | $45.00 | +$5.00 |
| 12% | $50.00 | $44.00 | +$6.00 |
| 22% | $42.50 | $39.00 | +$3.50 |
| 24% | $42.50 | $38.00 | +$4.50 |
| 32% | $42.50 | $34.00 | +$8.50 |
| 37% | $40.00 | $31.50 | +$8.50 |
LTCG/qualified rate: 0% for 10–12% brackets, 15% for 22–35%, 20% for 37%. State taxes not included. Illustrative only — verify with a tax advisor.
Where to hold SPYI for best tax efficiency
Ordinary income dividends are taxed at your marginal rate every year in a taxable account — sheltering them in a Roth or tax-deferred account eliminates the annual tax drag.
General guidance only — your optimal placement depends on your full tax situation, available account types, and other holdings. Consult a tax advisor for personalized advice.
Frequently asked questions
Is SPYI's dividend qualified or ordinary?
SPYI pays ordinary (non-qualified) dividends.
What is SPYI's after-tax dividend income?
At a 0.50% yield on $10,000 invested, SPYI generates approximately $50.00/year in gross dividends. After tax: $42.50 at the 15% qualified rate, or $39.00 at a 22% ordinary rate.
Should I hold SPYI in a Roth, IRA, or taxable account?
Ordinary income dividends are taxed at your marginal rate every year in a taxable account — sheltering them in a Roth or tax-deferred account eliminates the annual tax drag.
What is the difference between qualified and ordinary dividends?
Qualified dividends are taxed at the long-term capital gains rate (0%, 15%, or 20% depending on your income), which is significantly lower than ordinary income rates (10%–37%). To qualify, dividends must be paid by a US corporation or qualified foreign corporation, and you must hold the stock for more than 60 days around the ex-dividend date. Ordinary (non-qualified) dividends — common for REITs, covered-call ETFs, and bond funds — are taxed as regular income at your marginal rate.
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