Should we put anything in the field for Box 1b (qualified dividends), given that our 1099-DIV form says that the box 1a figure includes box 1b?

[robtm]

If your Box 1b on your 1099 is blank then you do not have any qualified dividends. You should leave it blank when you enter your 1099 data in TT.

[SabrinaD2]

If your 1099-DIV states that Box 1a (ordinary dividends) includes Box 1b (qualified dividends), you should enter the exact amounts from both Box 1a and Box 1b into TurboTax. This ensures the correct tax treatment, as qualified dividends are taxed at a lower rate than ordinary dividends

• If Box 1b is Blank: Leave Box 1b blank in TurboTax. If you believe this is an error, contact the issuer to reissue the 1099-DIV with the correct information

Why Separate Reporting is Important

Qualified dividends are taxed at a lower rate than ordinary dividends, so it's important to report them separately to ensure you receive the correct tax treatment

For more detailed instructions, you can refer to TurboTax Instructions for Form 1099-DIV

[dansole26]

Hi. Make sure that you are viewing form 1099-div , not the Year-end Summary page.

For example Schwab's year end "Tax year 2024 Form 1099 Composite" has among other things two different pages. 

The Year-end summary page words it exactly like your question.

The Form 1099-div several pages sooner in the statement clearly states Box 1A, 1B and the rest. Just copy those figures .

[Mike9241]

if there is an amount in 1b then most definitely enter it. That gets taxed at a lower rate than the other dividends and income. 

[av2799]

I have one more issue, I'm entering dividend received in India (which means I have not received an explicit 1099-DIV). However when I enter that (in TT Desktop Premier) it asks for box 1a, Box 1b. Since all dividend received in India qualifies (due to a tax treaty India has been added to a countries list that qualify in 2024 by IRS), I can enter it only in 1b. However at the time of "Smart Check", TT is always asking me to enter something in 1a and says "Box 1b should be less than or equal to 1a". @SabrinaD2 How do I correct this ? @pk also pls check. 

[RobertB4444]

Box 1b modifies 1a.  So you just enter the same amount in 1a and the amount that you enter into 1b will modify it according to the treaty and render it non-taxable.

@av2799 

[pk]

@av2799 , whereas others may quite disagree with me  -- however, I look at what am I trying to accomplish at the end of the day;  1. Get the most world tax benign situation i.e.  least tax load worldwise  ( counting  both the US  and the foreign taxing authorities );  2. keep it as simple as possible thus reducing my risk of a challenge -- because  no matter how strong / correct is one's case,  in a challenge one never wins overall.

Particularly in your case  of  qualified   foreign dividend -- even if you are right and can actually get  IRS to accept that the amount should be treated   like qualified  domestic dividend , what is the US tax result ?  A  reduced  tax burden ( capital gain tax rate ), thus reducing US tax levy on this doubly taxed income.   If India's tax rate  is not specifically  and equally reduced ( which it is not ), you now have a case  of  possibly  zero or low US tax on the "qualified dividend" while India taxes it as normal income.

Now look at this situation under the  double taxation relief lens.  What does that give you --- the allowable Foreign Tax credit for the year is LESSER of   US tax liability  and that  paid to India on the same  doubly taxed income.  So the best case is the credit of US tax.  So  if one is trying to increase the  US tax liability to get  the Indian tax  effect reduced to zero , we are going to wrong way.

To this add  the  situation -- Foreign Qualified  Dividend is not  common ( because it has to meet certain qualifications ( even if the country is declared eligible by meeting the  section 1(h)(11) )  the actual corp/entity  needs to meet the requirements  ( and not issuing  a 1099-DIV, makes it hard to prove the facts of the case ) outlined and is up to the  taxpayer / recipient to justify that these are indeed qualified dividends.

That is my take on this issue.   Others may see it differently but for me I abhor attention from the  IRS.

Is there more I can do for you ?

[av2799]

Thanks @pk its btw just 300 odd USD (converted from Indian rupees)

@RobertB4444(and @pk ) I followed what you said but if I put the same amount in 1a and 1b, my overall payback to IRS increases ! Pls advise.

[DaveF1006]

Delete your 1099 DIV entry.  Take note of what the tax-due amount is before you delete​ it. If it is the same as it was before you placed the amount in Box 1A, then you know that the program didn't calculate a tax due until you added an amount in Box 1A.

Now prepare a 1099DIV entry recording the same amounts in Box 1A and 1B. Since it is the same amount, you will be taxed at the capital gains rate and not ordinary income.