What is Form 1099-DIV?

Form 1099-DIV, Dividends and Distributions, reports dividend income and certain capital gain distributions you received during the tax year. You may receive this form from a brokerage firm, mutual fund company, bank, or other financial institution if you earned investment income.

Dividends are often paid when a company shares part of its profits with shareholders. Form 1099-DIV helps you report those payments correctly on your federal tax return.

Each box on Form 1099-DIV reports a specific type of income, tax withholding, or related information that may affect your return.

Understanding Form 1099-DIV Boxes

Box 1a – Total Ordinary Dividends

This amount represents your total taxable ordinary dividends for the year.

Box 1b – Qualified Dividends

This amount is included in Box 1a and may qualify for lower long-term capital gains tax rates.

Qualified dividends can also include dividends paid to a participant or beneficiary of an Employee Stock Ownership Plan (ESOP). While these dividends are reported as qualified dividends on Form 1040, they generally aren't considered investment income for other tax purposes.

Box 2a – Total Capital Gain Distributions

This amount reports capital gain distributions from a Regulated Investment Company (RIC) or Real Estate Investment Trust (REIT). The income is generally reported on Schedule D (Form 1040).

Box 2b – Unrecaptured Section 1250 Gain

This amount is the portion of Box 2a attributable to gains from certain depreciable real property. It is reported on the Unrecaptured Section 1250 Gain Worksheet.

Box 2c – Section 1202 Gain

This amount represents the portion of Box 2a that qualifies as Section 1202 gain from certain eligible small business stock.

Box 2d – Collectibles (28%) Gain

This amount is the portion of Box 2a attributable to gains from the sale or exchange of collectibles. If required, it is reported on the 28% Rate Gain Worksheet.

Boxes 2e and 2f

Not supported.

Box 3 – Nondividend Distributions

This amount is generally a return of your investment basis rather than a taxable dividend distribution.

Box 4 – Federal Income Tax Withheld

This box reports federal tax withheld from your dividend payments. The withholding is reported on Form 1040 and credited toward your tax liability.

Box 5 – Section 199A Dividends

This amount is the portion of dividends that may qualify for the Qualified Business Income (QBI) deduction under Section 199A.

Box 6 – Investment Expenses

This amount represents your share of investment expenses related to the dividend income reported in Box 1a.

Box 7 – Foreign Tax Paid

This amount reports foreign tax withheld from your dividend income. Depending on your situation, it may qualify for either:
  • A foreign tax credit on Form 1116, or
  • An itemized deduction on Schedule A (Form 1040)

Box 8 – Foreign Country or U.S. Possession

This information is not reported directly on the tax return.

Box 9 – Cash Liquidation Distributions

A cash liquidation distribution is money received when all or part of a company, fund, or investment is liquidated.

Although Box 9 appears on Form 1099-DIV, it is not entered as dividend income. Instead, it must be reported as a capital transaction.

To enter a Box 9 amount:

  1. Go to Federal.
  2. Select Income.
  3. Select Capital Gains and Losses (Schedule D).
  4. Choose Other Capital Gains Distributions.
  5. Enter:
    • Description: Cash Liquidation Distribution (1099-DIV Box 9)
    • Date Received: Use the date provided by the payer, or December 31 of the tax year if no date is shown.
    • Sales Price: Enter the Box 9 amount.
    • Cost Basis: Enter your basis in the investment.

Your basis determines whether you have a gain or loss on the transaction. If you don't know your basis, you may need to review your original investment purchase records.

This method correctly reports the liquidation proceeds on Schedule D according to IRS rules.

Box 10 – Noncash Liquidation Distributions

Not supported.

Box 11 – FATCA Filing Requirement

This box is informational only and is not reported directly on your tax return.

Box 12 – Exempt-Interest Dividends

This amount reports exempt-interest dividends received from a mutual fund or other regulated investment company (RIC).

Box 13 – Specified Private Activity Bond Interest Dividends

This amount is included in Box 12 and may be subject to the Alternative Minimum Tax (AMT). If applicable, it is reported on Form 6251.

Boxes 14–16 – State Tax Information

These boxes report state income tax withholding and other state-related information connected to the dividend income reported on the form.

Special Situations

Nominee Dividends

If you received a Form 1099-DIV for income that actually belongs to someone else, you are considered a nominee recipient.

In that situation, you may need to:

  • Issue Form 1099-DIV to the actual recipient(s), and
  • File copies with the IRS along with Form 1096.
Enter the amount paid to others in the Nominee Dividend field when reporting the dividend.

Decedent Dividends

A decedent dividend occurs when a taxpayer dies after a dividend is declared but before the dividend is received. Special reporting rules may apply depending on who ultimately receives the payment.

Where Do I Enter Form 1099-DIV?

To enter Form 1099-DIV in the program:
  1. Select Federal.
  2. Select Income and then My Forms.
  3. Select 1099-DIV, INT, OID.
  4. Answer Yes when asked whether you earned interest or dividend income from a financial institution.
  5. Select Dividend Income (Form 1099-DIV).
  6. Enter the information from your form.
Important:
  • The payer's name is required.
  • The payer's address and Tax Identification Number (TIN) are not required.
Once entered, the program automatically carries the information to the appropriate federal and state tax forms.

Need Help Reporting Your Dividends?

Most taxpayers can simply enter the amounts from each box exactly as shown on their Form 1099-DIV, and the software will handle the calculations behind the scenes. If your form includes uncommon items such as liquidation distributions, foreign taxes paid, or Section 199A dividends, the program will guide you through any additional entries that may be required.

To view a sample Form 1099-DIV, click here.

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