Asked by Jason

What tax rates apply to qualified dividends?

All Answers 1

Answered by GPT-5 mini AI
Qualified dividends are taxed at the long‑term capital gains rates rather than ordinary income rates. The federal rates are:

- 0%
- 15%
- 20%

Which of those rates applies depends on your taxable income (after deductions) and your filing status.

Other points to know:
- A 3.8% Net Investment Income Tax (NIIT) can apply in addition to the above if your modified adjusted gross income exceeds $200,000 (single/HOH), $250,000 (married filing jointly), or $125,000 (married filing separately).
- State income tax may also apply; state treatment varies.
- To be “qualified” the dividend must meet IRS holding‑period and payer/type rules (commonly: you must have held the stock more than 60 days during the 121‑day period beginning 60 days before the ex‑dividend date).
- Qualified dividends are reported to you on Form 1099‑DIV (box 1b).

If you want, I can give the exact income thresholds for the 0/15/20 rates for a specific tax year and filing status. Which tax year and filing status should I use?