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berhanut
Returning Member

Dividend from employee stocks

Hi, I received some dividends in 2020 from my employee stock option. My employer did not give me any 1099 forms, rather they told me to file it as foreign investment as the dividends are normally paid from Australia (it is Australian Comp). The employer did not hold any taxes. Do I enter those dividends as income? If so, where do I enter them? Thanks

3 Replies
npierson7
Level 1

Dividend from employee stocks

Yes, you need to report it as income. When dividends are directly paid to you on the stock allocated to your ESOP accounts, such dividends are fully taxable, although they are exempt from income tax withholding. 

If you know the exact amount of the dividend and know that amount was the only thing that will be on the 1099-DIV, then, it's fine to enter that data without having the form.

 

How to enter dividends on TurboTax?

 

In TurboTax Home & Business or Self-Employed click Personal Income. In other versions click Wages & Income. Click  I'll choose what I work on.  On the screen "Your Income Summary," scroll down to the Interest and Dividends section and enter your information.

berhanut
Returning Member

Dividend from employee stocks

I am using Turbo Tax Premier for this tax return. I received dividends from my employer and they reported it as qualified dividends. I plugged the amount under  Wages & Income/ Interest & Dividends/Dividend on 1099 under Box1b - Qualified dividends, it lowered my taxes by at least $500 when I had to pay taxes on the dividends I earned. In other words, I see a drop in taxes I owe instead of me paying additional tax on the qualified dividend I earned. Is this scenario possible or is this a software glitch?

 

Thanks

Terefe  

DaveF1006
Employee Tax Expert

Dividend from employee stocks

No, because your tax is not determined from the IRS tax table but now is determined by the Schedule D Tax Worksheet. This worksheet taxes income under a whole new formula that was generated by your qualified dividends.  Much of your income is now being taxed by a more favorable capital gain rate than the ordinary income rate.

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