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section 199A dividends

How does a section A 199 dividends (very small amount) on a 1099div. impact your tax returns? I realize Intuit tax software will take care the calculation if necessary, but for an education purpose , could someone give an explanation about what is  the section A 199 dividends and how it effects your returns, please?  Thanks.

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DawnC
Employee Tax Expert

section 199A dividends

The amount in box 5 of 1099-DIV is considered Qualified Business Income (QBI) which is eligible for a 20% tax deduction.  The deduction is also called the Section 199A deduction.  

 

This deduction, created by the 2017 Tax Cuts and Jobs Act, allows non-corporate taxpayers to deduct up to 20 percent of their QBI, plus 20% of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.  

  1. REIT / PTP Component. This component of the deduction equals 20 percent of the combined qualified REIT dividends (including REIT dividends earned through a regulated investment company (RIC)) and qualified PTP income. This component is not limited by W-2 wages or the UBIA of qualified property. Depending on the taxpayer's income, the amount of PTP income that qualifies may be limited depending on the type of business engaged in by the PTP.

The deduction is limited to the lesser of the QBI component plus the REIT/PTP component or 20 percent of the taxpayer's taxable income minus the net capital gain.

 

You will see the deduction on Line 10 of your Form 1040.  

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JamesG1
Employee Tax Expert

section 199A dividends

Section 199A dividends are generally reported on 1099-DIV box 5.  In TurboTax Online report the dividends under Federal / Wages & Income / Your Income / Dividends on 1099-DIV.

 

The dividends may also be reported on an a K-1 at Federal / Wages & Income / Your Income / Schedule K-1.

 

The dividends are eligible for the Qualified Business Income Deduction.  This deduction, created by the 2017 Tax Cuts and Jobs Act, allows non-corporate taxpayers to deduct up to 20 percent of their Qualified Business Income.

 

The deduction will be claimed on either Form 8995, Qualified Business Income Deduction Simplified Computation, or Form 8995-A, Qualified Business Income Deduction.

 

 

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17 Replies
DawnC
Employee Tax Expert

section 199A dividends

The amount in box 5 of 1099-DIV is considered Qualified Business Income (QBI) which is eligible for a 20% tax deduction.  The deduction is also called the Section 199A deduction.  

 

This deduction, created by the 2017 Tax Cuts and Jobs Act, allows non-corporate taxpayers to deduct up to 20 percent of their QBI, plus 20% of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.  

  1. REIT / PTP Component. This component of the deduction equals 20 percent of the combined qualified REIT dividends (including REIT dividends earned through a regulated investment company (RIC)) and qualified PTP income. This component is not limited by W-2 wages or the UBIA of qualified property. Depending on the taxpayer's income, the amount of PTP income that qualifies may be limited depending on the type of business engaged in by the PTP.

The deduction is limited to the lesser of the QBI component plus the REIT/PTP component or 20 percent of the taxpayer's taxable income minus the net capital gain.

 

You will see the deduction on Line 10 of your Form 1040.  

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section 199A dividends

My 199A dividends are for a trust.  I'm using TurboTax Business and the amounts do not populate the 1041 Form and subsequently not the K-1.

section 199A dividends

I have the same situation and am not sure what to do

section 199A dividends

How are Section 199A dividends entered in 2020 TurboTax?

JamesG1
Employee Tax Expert

section 199A dividends

Section 199A dividends are generally reported on 1099-DIV box 5.  In TurboTax Online report the dividends under Federal / Wages & Income / Your Income / Dividends on 1099-DIV.

 

The dividends may also be reported on an a K-1 at Federal / Wages & Income / Your Income / Schedule K-1.

 

The dividends are eligible for the Qualified Business Income Deduction.  This deduction, created by the 2017 Tax Cuts and Jobs Act, allows non-corporate taxpayers to deduct up to 20 percent of their Qualified Business Income.

 

The deduction will be claimed on either Form 8995, Qualified Business Income Deduction Simplified Computation, or Form 8995-A, Qualified Business Income Deduction.

 

 

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peter
New Member

section 199A dividends

Thanks for the reply. But in terms of Turbotax, where do I enter? do i need to go to the form 8995 directly?

can Turbotax guide?

 

section 199A dividends

199A dividends can be entered in TurboTax Premier (and perhaps other versions) in box 5.  To get to box 5, starting at "Dividends on 1099" select "Start" or "Update", then for the line identifying the dividend payer select "Edit"  to reveal additional boxes including box 5.   TurboTax unfortunately is using one button for the dual purposes of making changes (edits) as well as additional entries (additional 1099 boxes).

section 199A dividends

This does not appear to be the case in Turbotax Deluxe. I don't see a place for line 5 or line 11, both of which were non-zero on my 1099-DIV.

 

Any ideas?

section 199A dividends

You may need to purchase TurboTax Premier as that is where I found it when doing my 2020 taxes.  Or ask TurboTax to explain why Section 199A dividends do not seem to be supported in TurboTax Deluxe.

HeatherPLO
Intuit Alumni

section 199A dividends

There is a checkbox on the entry screen "My form has info in more than just these boxes (this is uncommon)". You will need to check that box to see the additional spaces to enter your data.

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Cass0317
Intuit Alumni

section 199A dividends

Please see the TurboTax FAQ below for instructions on how to add a 1099:

section 199A dividends

Clicking on the checkbox still does not bring up those options. I did figure it out by going to the forms view and entering it there.

section 199A dividends

I was able to enter the information in the forms view. 

section 199A dividends

Where to enter 199A dividends??     Stanley Madris

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