What qualifies as a qualified dividend?
A qualified dividend is a dividend that falls under capital gains tax rates that are lower than the income tax rates on unqualified, or ordinary, dividends.
The dividend must have been paid by a U.S.
company or a qualifying foreign company.
The dividends are not listed with the IRS as those that do not qualify.
Are most stock dividends qualified?
Generally speaking, most regular dividends from U.S. companies with normal company structures (corporations) are qualified. For individuals, estates, and trusts, qualified dividends are taxed at the current capital gains rate of 15%.
Where are qualified dividends reported?
Ordinary dividends are reported on Line 3b of your Form 1040. Qualified dividends are reported on Line 3a of your Form 1040.
Are stock dividends qualified dividends?
Generally, any dividend that is paid out from a common or preferred stock is an ordinary dividend unless otherwise stated. Qualified dividends are dividends that meet the requirements to be taxed as capital gains. Under current law, qualified dividends are taxed at a 20%, 15%, or 0% rate, depending on your tax bracket.