What is a qualified dividend?

[MatthewS1 · Accepted solution]

Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. They should be shown in box 1b of the Form 1099-DIV you receive.

The maximum rate of tax on qualified dividends is the following.

• 0% on any amount that otherwise would be taxed at a 10% or 15% rate.

• 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39.6%.

• 20% on any amount that otherwise would be taxed at a 39.6% rate.

To qualify for the maximum rate, all of the following requirements must be met.

• The dividends must have been paid by a U.S. corporation or a qualified foreign corporation. (See Qualified foreign corporation , later.)

• The dividends are not of the type listed later under Dividends that are not qualified dividends ....

• You meet the holding period

• More information here - https://www.irs.gov/publications/p17/ch08.html#en_US_2016_publink1000171584