Dividend Tax Calculator

Ordinary dividends are taxed as ordinary income at your regular marginal income tax rate — the same rate that applies to wages and salaries, up to 37% federally. Qualified dividends, by contrast, are taxed at the lower long-term capital gains rates of 0%, 15%, or 20%, depending on your total taxable income. Qualified dividends must come from U.S. corporations or qualifying foreign corporations, and the underlying stock must be held for more than 60 days during the 121-day period surrounding the ex-dividend date.

A dividend qualifies for the preferential tax rate if it is paid by a U.S. corporation or a qualifying foreign corporation (one listed on a major U.S. exchange or from a country with a U.S. tax treaty), and if the investor has held the underlying stock for the required holding period — more than 60 days during the 121-day window centered on the ex-dividend date. Dividends from REITs, master limited partnerships, money market funds, and most non-qualified preferred stock do not qualify for the lower rates. Your brokerage 1099-DIV separates qualified dividends (Box 1b) from total ordinary dividends (Box 1a).

Qualified dividends are taxed at 0% if your taxable income falls within the 10% or 12% ordinary income brackets (up to approximately $48,350 for single filers, $96,700 for married filing jointly in 2025). The 15% rate applies to most middle- and upper-middle-income taxpayers in the 22%, 24%, 32%, and 35% ordinary income brackets (up to roughly $533,400 single / $600,050 married). The 20% rate applies only to the highest-income taxpayers above those thresholds. Additionally, the 3.8% NIIT surtax can apply on top of these rates for filers with MAGI above $200,000 (single) or $250,000 (married).

Yes — qualified dividends are added on top of your ordinary income to determine where they fall within the long-term capital gains brackets. For example, if you have $40,000 of ordinary income and $20,000 of qualified dividends, the first $8,350 of qualified dividends may fall in the 0% zone (filling up the $48,350 single threshold) and the remaining $11,650 would be taxed at 15%. This stacking effect means taxpayers near the 0%/15% boundary should be especially attentive to dividend income level when managing their tax bracket.

The Net Investment Income Tax (NIIT) is a 3.8% Medicare surtax imposed under the Affordable Care Act on net investment income — which includes both qualified and ordinary dividends — for taxpayers whose modified AGI exceeds $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately). It applies on the lesser of net investment income or the amount of MAGI above the threshold. This can effectively make the top rate on qualified dividends 23.8% (20% + 3.8%) or on ordinary dividends as high as 40.8% (37% + 3.8%) for the highest earners.

Form 1099-DIV Box 1a reports your total ordinary dividends. Box 1b reports the portion of Box 1a that qualifies for the preferential rate — it is always less than or equal to Box 1a, not in addition to it. If Box 1b is much less than Box 1a, it means a significant portion of your dividends came from REITs, MLPs, money market funds, or other sources that pay ordinary (non-qualifying) dividends. This calculator asks you to enter qualified dividends and ordinary (non-qualified) dividends separately to accurately model the two different tax rates.

Blended effective rate equals total dividend tax (qualified dividend tax + ordinary dividend tax) divided by total dividends received (qualified + ordinary). It represents the average tax rate across your entire dividend income, which is more useful for planning purposes than citing either the qualified or ordinary rate alone when your dividend mix is a blend of both types.