Carpenter's Union Vacation, holiday and sick leave, with dividends . . . taxable?

[garycarols]

My son belongs to the Carpenter's Union (California).  His employer pays into the Carpenter's Union Vacation, Holiday, and Sick Leave Trust Fund.  Nothing shows up on his W-2.  The Trust Fund sent a check to my son for the accrued amount in his account and also pays dividends of the earnings on the cash.  With the check is a letter saying the dividend portion may be taxable income for 2021.  How do I handle his $5000+ in vacation, holiday and sick leave, and also the ~$300 in dividends that were included in the check?

Thanks so much for your advice on this!  

[Vanessa A]

If he has not yet received the sick leave, vacation pay or holiday pay then this is not yet reportable.  It becomes reportable when he actually uses it.  When he does use it, it should be included on his W2.

The dividends should be reported on a form 1099-DIV by the company that is paying the dividends to your son. Forms were due to be sent out by January 31, so if you have not yet received one, it could be a mail issue.  You could also contact his union to ask if one was mailed.  When you do receive the 1099-DIV click the following to enter the dividends:

• Federal
• Income and Expenses
• Scroll down click show more next to Interest and Dividends
• Start next to Dividends on 1099-DIV