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Why did turbo tax adjust my 1099-DIV input for qualified dividends by adding a line "Adjusted qualified dividends" in Box 1b on the Turbo Tax Form 1099-DIV Worksheet?

The amount on the "Adjusted qualified dividends" line appears to be the amount input to Box 5, Section 199A dividends which is more than 10 times lower than the amount of qualified dividends that was input and is shown as qualified dividends on the Turbo Tax Form 1099-DIV Worksheet, Box 1b.  This is from a 2022 Fed Tax return that was discovered when comparing to the 2023 return.  The 2023 1099-DIV Worksheet correctly shows the input amount of qualified dividends, the adjusted qualified dividends line is blank, and this worksheet does have a value input in Box 5, Section 199A dividends.  Why would Turbo Tax in 2022 create an adjusted qualified dividend amount, then use this much smaller amount when calculating the Federal Tax due?
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2 Replies
ThomasM125
Expert Alumni

Why did turbo tax adjust my 1099-DIV input for qualified dividends by adding a line "Adjusted qualified dividends" in Box 1b on the Turbo Tax Form 1099-DIV Worksheet?

It may be because the dividends did not meet the required holding period. It seems you have to hold stock for a minimum of 60 days for the dividends to be considered qualified. That information may have been downloaded from your broker as a part of the Form 1099-DIV. The adjustment would be made after the qualified dividends were entered on the Form 1099-DIV, which may report the full amount of qualified dividends before the adjustment. You should review your Form 1099-DIV supplemental information to see if there is mention of this.

 

You will see these screens in TurboTax:

 

[Edited 2/27/24 at 2:40 PST] @dad6421-aol-com 

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Why did turbo tax adjust my 1099-DIV input for qualified dividends by adding a line "Adjusted qualified dividends" in Box 1b on the Turbo Tax Form 1099-DIV Worksheet?

Thank you Thomas.  This was very helpful. 

 

I always input the data myself, so the suggestion that a 1099-DIV import from the broker may have caused this situation can be ruled out.  I see that I did check the box that you highlighted in yellow above, but only because I had Section 199A dividends to report.  Looking at the supplemental 1099-DIV, I see from the details that the very small amount was from a small cap value investment fund most likely related to dividends from REIT's held in this fund.  All the qualified dividends that did not get reported because I had checked this box were from stocks that I had held for many years, which is why there was no mention of the 60 timing rule in the supplemental section of the 1099-DIV.  My mistake was to check the box without realizing the nature of the section 199A dividends.

 

Now I need to file an amended return to recover the qualified dividend tax benefit that I did not receive because I checked the section 199A dividend box under uncommon situations.

 

Thank you again.

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