What Is IRS Form 1099-DIV?

Form 1099-DIV is sent by brokerages to investors who received dividends or capital gain distributions during the year. If you own stocks, mutual funds, or ETFs in a taxable account, this is a form you'll likely see every January.

Ordinary Dividends vs. Qualified Dividends

Box 1a shows total ordinary dividends — the full amount of dividends you received. Box 1b shows the portion that qualifies for the lower qualified dividend tax rate. Qualified dividends are taxed at 0%, 15%, or 20% depending on your income level, rather than at your ordinary income tax rate. To qualify, dividends generally need to come from U.S. corporations or certain foreign corporations, and you need to have held the shares for a minimum period.

Capital Gain Distributions

Box 2a shows capital gain distributions from mutual funds and ETFs. Even if you didn't sell any shares yourself, fund managers buy and sell inside the fund throughout the year, and when they do, the gains get distributed to shareholders. These are taxed at long-term capital gains rates, which are lower than ordinary income rates for most people.

Foreign Tax Paid

Box 7 shows foreign tax paid if you hold international funds or stocks. You can usually claim this as a Foreign Tax Credit on your return, which reduces your U.S. tax dollar-for-dollar rather than just reducing your income. This avoids double taxation on the same income.

Tax-Exempt Dividends

Box 12 shows dividends that are exempt from federal tax, typically interest from municipal bond funds. These don't add to your federal taxable income, but some states still tax them depending on where the bonds were issued.

Keeping Records

If your brokerage sends a consolidated 1099 (which many do, combining 1099-DIV, 1099-INT, and 1099-B on one document), you may not receive it until mid-February. Brokerages have a later deadline for consolidated forms. Don't file too early if you're waiting for this document.