Qualified Dividend

Qualified Dividend

A type of dividend to which capital gains tax rates are applied. These tax rates are usually lower than regular income tax rates.

Notes:

Ordinary dividends that do not qualify for this tax preference are taxed at an individual's normal income tax rate.

In order to qualify: 1. The dividend must have been paid by an American company or a qualifying foreign company. 2. The dividends are not listed with the IRS as dividends that do not qualify. 3. The required dividend holding period has been met.

See also: Capital Gain, Declaration Date, Dividend, Ex-Dividend, Holder of Record, Income Tax, Payment Date, Record Date