Qualified dividends are reported in box 1b of Form 1099-DIV, as part of the total ordinary dividends in box 1a. Per IRS Publication 550, a dividend qualifies only if it was paid by a U.S. corporation or a qualified foreign corporation, is not on the IRS list of excluded dividends (such as capital gain distributions or credit union "dividends"), and you meet the holding period.
Holding period
You must hold the stock more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. For certain preferred stock the test is more than 90 days in a 181-day window.
2026 rates
Qualified dividends stack on top of ordinary income and use the long-term capital gains thresholds from Rev. Proc. 2025-32:
| Rate | Single | Married filing jointly |
|---|---|---|
| 0% | taxable income up to $49,450 | up to $98,900 |
| 15% | up to $545,500 | up to $613,700 |
| 20% | above $545,500 | above $613,700 |
Example
A single filer with $40,000 of ordinary taxable income receives $15,000 of qualified dividends. The first $9,450 fills the 0% band (up to $49,450) and the remaining $5,550 is taxed at 15%: tax on the dividends = $832.50. As ordinary dividends taxed at 12% and 22%, the same $15,000 would cost $2,260 ($10,400 at 12% plus $4,600 at 22%).
The full rules and more examples are in how are dividends taxed; the capital gains calculator applies the same 0/15/20% thresholds.