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The rates on qualified dividends range from 0 to 23.8%. The category of qualified dividend (as opposed to an ordinary dividend) was created in the Jobs and Growth Tax Relief Reconciliation Act of 2003 – previously, there was no distinction and all dividends were either untaxed or taxed together at the same rate. [1]
Most dividends paid by a corporation are ordinary dividends and do not conform to the criteria for qualified dividends. This means they are taxed at your individual marginal income tax rate.
For certain preferred stocks, that holding period increases to at least 91 days out of the 181-day period that began 90 days before the preferred’s ex-dividend date. Qualified dividend status ...
The IRS rules regarding classification of dividends as ordinary or qualified are complicated and it can be difficult for dividend investors to tell, before receiving a 1099-Div form, how their ...
There are also special rules for qualified dividends, which are dividends that are paid by companies that have met certain requirements. Qualified dividends are taxed at a lower rate of 0%, 15%, or 20%, depending on the taxpayer's income. [citation needed] The history of dividend taxation outside the US is just as varied as it is in the US.
Earning dividends is a valuable source of income for investors, particularly those saving for retirement. The IRS allows qualified dividends to be taxed at a lower capital gains rate than the ...