Question about qualified dividend income

[Anothercrisis]

My only 2024 income is from qualified dividends.  Subtracting my itemized deductions I see that my taxable income is 23,000.  I am single.  It is my understanding that since my income is below $44,800, I do not owe any tax.  I know this would be true if the income was from capital gains.  What I am wondering is if the same applies when the income is from qualified dividends.

Thank you!

[Bsch4477 · Accepted solution]

Yes, qualified dividends are taxed like capital gains. 

[rjs · Accepted solution]

Yes, qualified dividends are treated the same as long-term capital gain. For 2024 if you are filing as single there is no tax on qualified dividends or long-term capital gain if your taxable income is $47,025 or less.

Note that the lower tax rates for capital gain apply only to long-term capital gain. Short-term capital gain is taxed at the rates for ordinary income such as wages.

[Anothercrisis]

Thank you.

If I understand correctly, this applies only to federal taxes.  I believe I do owe Virginia State tax on the taxable amount.  Is this correct?

[Bsch4477]

Correct. For Virginia purposes, there is no special tax rate for capital gains or preferential treatment for qualified dividends.

[Hal_Al]

Q.  It is my understanding that since my taxable  income (after deductions)  is below $47,150 (2024), I do not owe any tax.  I know this would be true if the income was from capital gains.  What I am wondering is if the same applies when the income is from qualified dividends?

A. Yes.  But, you are still required to file a federal (and probably state) income tax return because your total income is over $14,600 .    Your tax will be calculated on the Qualified dividends and capital gains work sheet. Technically, that income is taxed at 0%.  You will not qualify for the free edition of TurboTax.