What Is Form 1099-DIV for Dividends and Distributions?

Form 1099-DIV, Dividends and Distributions, is an information return sent by financial institutions like banks and brokerage firms to investors who received at least $10 in dividend income. The form’s purpose is to report this income to both you and the Internal Revenue Service (IRS) for your annual tax return. The information on this form is necessary for accurate tax preparation, but you do not file the form itself with your return.

Understanding the Boxes on Form 1099-DIV

When you receive a Form 1099-DIV, it has several numbered boxes with figures related to your investment income. Box 1a, “Total ordinary dividends,” shows the total amount of ordinary dividends you received. This figure is the sum of all such payments from that specific payer for the year.

A portion of the amount in Box 1a may also appear in Box 1b, “Qualified dividends.” Qualified dividends are subject to lower tax rates than ordinary dividends. For a dividend to be qualified, it must be paid by a U.S. corporation or a qualifying foreign corporation, and you must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. The amount in Box 1b is a subset of Box 1a, not an additional amount.

Box 2a reports “Total capital gain distributions.” These are payments from a mutual fund or a real estate investment trust (REIT) that result from the fund’s sale of assets at a profit. These distributions are treated as long-term capital gains for tax purposes, regardless of how long you have owned the shares in the fund.

You may also see an amount in Box 3, “Nondividend distributions.” This figure represents a return of capital, meaning the company is returning a portion of your original investment. This amount is not taxed in the year you receive it but instead reduces your cost basis in the investment, which affects the capital gain or loss when you sell the security.

Box 7, “Foreign tax paid,” shows any tax withheld by a foreign government on dividends from international investments. This information is important because you may be able to claim either a tax credit or an itemized deduction for these foreign taxes. The corresponding country will be listed in Box 8.

Tax Treatment of Dividends and Distributions

The amounts on your Form 1099-DIV are subject to different tax treatments. The portion of your dividends considered ordinary—calculated by subtracting Box 1b from Box 1a—is taxed at your regular income tax rates. These are the same marginal tax rates that apply to your wages and salary, which can range up to 37%.

Qualified dividends, shown in Box 1b, and total capital gain distributions from Box 2a, are taxed at long-term capital gains rates. For the 2025 tax year, these rates are 0%, 15%, or 20%, depending on your total taxable income and filing status. Taxpayers with income below certain thresholds, which are adjusted annually for inflation, can qualify for the 0% rate.

Higher-income taxpayers may also be subject to the Net Investment Income Tax (NIIT). This is a 3.8% tax that applies to the lesser of your net investment income or the amount by which your modified adjusted gross income exceeds certain thresholds. These thresholds are $200,000 for single filers and $250,000 for those married filing jointly. This tax is calculated on Form 8960 and is in addition to the capital gains tax.

Reporting Dividend Income on Your Tax Return

The information from Form 1099-DIV must be transferred to your Form 1040 tax return. You will report total ordinary dividends and qualified dividends in the income section of your return, following the form’s specific instructions.

If your total ordinary dividend income from all sources is more than $1,500, you are required to file Schedule B, Interest and Ordinary Dividends. This schedule requires you to list each payer’s name and the amount of ordinary dividends you received from each one. The total is then carried over to the appropriate line on your Form 1040.

Capital gain distributions from Box 2a are reported on Schedule D, Capital Gains and Losses, or directly on Form 1040 if you have no other capital gains or losses to report. For the foreign tax paid in Box 7, you have a choice. You can either claim a foreign tax credit by filing Form 1116, Foreign Tax Credit, or take an itemized deduction for the foreign taxes on Schedule A. The credit is often more beneficial, but the deduction is simpler to claim.

Handling Corrections and Nominee Distributions

If you receive a Form 1099-DIV that contains an error, contact the payer who issued it and request a corrected form. The payer will send a new form with the “Corrected” box checked to both you and the IRS. It is important to address these errors, as the IRS matches the information reported by payers with the income you report on your return.

A less common situation involves receiving a Form 1099-DIV as a “nominee.” This occurs when the form is in your name, but some or all of the income belongs to another person. In this case, you must file a separate Form 1099-DIV for the actual owner, listing yourself as the “Payer” and the other person as the “Recipient.” On your own tax return, you report the full amount from the original 1099-DIV on Schedule B and then subtract the amount belonging to the other person, labeling it as a “Nominee Distribution.”