Equity Premium Income Exchange-Traded Funds: How Much Income Do You Get to Keep after Taxes?

Equity premium income exchange-traded funds (ETFs) focus on dividends and call writing to enhance the cash flows produced by the portfolio. However, not all equity premium income ETFs are taxed the same, and many of these funds were designed with non-taxable retirement accounts in mind. Taxable investors should understand how the fund is structured and how the distributions are taxed before investing in these funds. The good news is that fund managers have tools at their disposal that can make these funds more tax efficient.