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Ted-Fred
New Member

Have other users found that the amount entered in a 2020 1099-DIV Box 5 (Section 199A dividends) is not handled correctly and reduces your Qualified Dividends?

If you drill down to the Form 1099-DIV Worksheet, you will find the amount listed as "Adjusted qualified dividends on Box 1b, rather than Section 199A dividends on Box 5
3 Replies
AmyC
Employee Tax Expert

Have other users found that the amount entered in a 2020 1099-DIV Box 5 (Section 199A dividends) is not handled correctly and reduces your Qualified Dividends?

The box 5 dividends qualify for QBI, which is not finalized. Until the forms are finalized, the computation is not accurate. The IRS does not open until February 12. They work on forms from most common to least common. See Federal form availability for expected release dates. Once released, we work to incorporate them quickly.

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rtanurcpa
Returning Member

Have other users found that the amount entered in a 2020 1099-DIV Box 5 (Section 199A dividends) is not handled correctly and reduces your Qualified Dividends?

Yes there is a problem with this.  When you enter an amount from the 1099 div for section 199A it reduces qualified dividends and I dont' beleive that is correct.  What are others doing to work your way around this

SamS1
Employee Tax Expert

Have other users found that the amount entered in a 2020 1099-DIV Box 5 (Section 199A dividends) is not handled correctly and reduces your Qualified Dividends?

I ran your scenario through TurboTax desktop and TurboTax Online and did not find the qualified dividend amount decreased by the Sec 199A dividends entered in box 5. The qualified dividend amounts flowed through the Qualified Div/Cap Gains tax calculation worksheet and the 199A dividends were used for the qualified business income deduction on line 13.  

 

The Sec 199A dividends are part of Box 1a Total dividends so the amount in box 5 could not be more than the amount in box 1a.  

 

There are some holding period requirements to gain the favorable tax treatment for Sec 199A dividends. The required holding period is more than 45 days during the period beginning 45 days before the ex-dividend date and ending 45 days after the ex-dividend date.  There is a 60 day holding period requirement for qualified dividend favorable tax treatment.  

 

You can always review your 1040 in TurboTax Online prior to finishing your return.  You can review your 1040 in the following steps:

 

  1. While in your TurboTax account, select Tax Tools in the left margin
  2. Select Tools
  3. Select View a Tax Summary
  4. In the left margin, select Preview my 1040
  5. Then "Back" when you are finished.

 

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