Form 1099-DIV is used to report dividends earned throughout the tax year, as well as certain capital gain distributions. Dividends are usually paid when stocks are doing well. Each box of the Form 1099-DIV contains information that the taxpayer may need to complete their tax return.
Box entries
Box 1a Total ordinary dividends - This amount is the total ordinary dividends that are taxable.
Box 1b Qualified dividends - This amount is the portion of the amount reported in Box 1a that may be eligible for reduced capital gains tax rates.
This entry may also be for dividends paid to a participant or beneficiary of an employee stock ownership plan (ESOP). They are reported as qualified dividends on Form 1040 but are not considered investment income for any other purposes.
Box 2a Total capital gain distributions - This amount is distributions from a regulated investment company (RIC) or a real estate investment trust (REIT). This amount is reported on Schedule D (Form 1040).
Box 2b Unrecaptured Section 1250 gain - This amount is the portion of Box 2a that is a gain from certain depreciable real property. This is reported on the Unrecaptured Section 1250 Gain Worksheet.
Box 2c Section 1202 gain - This amount is the portion of Box 2a that is Section 1202 gain from certain small business stock.
Box 2d Collectibles (28%) gain - This amount is the portion of Box 2a that is the 28% rate gain from sales or exchanges of collectibles. If required, it is reported on the 28% Rate Gain Worksheet.
Box 2e - 2f NOT SUPPORTED
Box 3 Nondividend distributions - This amount is a return of the cost or basis in the investment rather than a distribution made from the earnings of the investment.
Box 4 Federal income tax withheld - This is the tax withheld out of the interest paid on the investment. It is reported on Form 1040 as federal tax withheld.
Box 5 Section 199A dividends - This the portion of the amount in Box 1a that may be eligible for the 20% qualified business income deduction under section 199A.
Box 6 Investment expenses - This is the portion of the amount in Box 1a that is the taxpayer's share of investment expenses.
Box 7 Foreign Tax Paid - This amount was paid out of the dividends on the investment and can be used to claim 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 - Not reported on the tax return.
Box 9 Cash liquidation distributions - This amount is the cash the investor/taxpayer received upon liquidation of all or part of the underlying entity.
Box 10 Noncash liquidation distributions - NOT SUPPORTED
Box 11 FATCA filing requirement - Not reported on the tax return.
Box 12 Exempt-interest dividends - This is the amount of exempt-interest dividends from a mutual fund or other RIC.
Box 13 Specified private activity bond interest dividends - This is the portion of the Box 12 amount that is subject to the alternative minimum tax (AMT) reported on Form 6251.
Box 14 - 16 contain information related to state tax withholding.
Nominee Dividend - If the taxpayer received a 1099-DIV on behalf of someone else, they are a nominee. They will need to issue 1099-DIV(s) to the recipient(s), along with copies filed with the IRS summarized on Form 1096. Enter the amount of the dividend indicated paid to others in the Nominee Dividend box.
Decedent Dividend- If the taxpayer is deceased and didn't receive the dividend before their death. For example: they died between the time the dividend was declared and the time it actually arrived in the mail or in their account.
Where to enter Form 1099-DIV?
To enter Form 1099-DIV, go to:
- Federal
- Income
- 1099-DIV, INT, OID
- Did you earn any interest or dividend income from a bank, brokerage firm or some other financial institution?
- Dividend Income, Form 1099-DIV
You will be prompted to select the form and type of income you need to report. Select the appropriate form and enter the information from your original form.
The program will carry the figures that you enter to the appropriate places on your return. If you would like to know where to look for each item, click the link below. Included in the document will be “Instructions for Recipient”. Use these instructions to determine where the figures should appear on your return forms.
To view a sample Form 1099-DIV, click here.