If you are asking what is a 1099-DIV, it is the IRS information return that banks, brokers, and mutual fund companies use to report the dividends and distributions they paid you during the year, sending one copy to you and another to the IRS. You typically receive one when a single payer distributed $10 or more.
Form 1099-DIV reports dividends and distributions of $10 or more from a single payer to you and to the IRS. You do not file the form itself; you copy its box figures onto your Form 1040. For 2026, qualified dividends and capital gain distributions are taxed at 0%, 15%, or 20% depending on taxable income (Source: IRS Rev. Proc. 2025-32).
What is a 1099-DIV and who sends it?
A 1099-DIV is an IRS information return that a payer, usually a bank, brokerage, or mutual fund company, uses to report dividends and other distributions it paid you. The payer must file the form and furnish you a copy when the total reaches $10 or more, or when it pays $600 or more in a liquidation (Source: IRS 2025 Instructions for Form 1099-DIV).
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The payer deadline to send recipient copies is January 31 following the tax year (Source: IRS 2025 Instructions for Form 1099-DIV). If you hold taxable investments across several firms, expect a separate 1099-DIV, or a consolidated 1099 that contains one, from each payer that met the threshold. The $10 figure has never been adjusted for inflation, so it applies the same way each year.
Why did you get a 1099-DIV?
You received a 1099-DIV because a taxable account paid you dividends or capital gain distributions of at least $10 during the year. Common sources include individual stocks, mutual funds, exchange-traded funds (ETFs), and real estate investment trusts (REITs) held in a regular brokerage or fund account (Source: IRS 2025 Instructions for Form 1099-DIV).
Distributions inside a tax-deferred or tax-free retirement account do not generate a 1099-DIV. Dividends earned within a 401(k), traditional IRA, or Roth IRA are not reported on this form because they are not currently taxable events; those accounts report money only when it leaves the account, on Form 1099-R (Source: IRS 2025 Instructions for Form 1099-DIV; IRS Topic No. 404).
That distinction matters for planning. Because dividends held inside retirement accounts stay off your current return, the mix of taxable versus tax-advantaged holdings can change how much investment income shows up each year, which is one input a Roth conversion analysis often models.
1099-DIV box-by-box breakdown
The table below covers every box on Form 1099-DIV in plain English, including the ones filers often find confusing, such as Box 2b unrecaptured Section 1250 gain, Box 2c Section 1202 gain, and Box 5 Section 199A dividends. Each box either reports a type of income or provides information used when the figures are entered on a return (Source: IRS 2025 Instructions for Form 1099-DIV).
| Box | Label | What it means |
|---|---|---|
| 1a | Total ordinary dividends | All taxable dividends for the year, including money-market-fund dividends and short-term capital gains passed through by mutual funds. This is the headline dividend number. |
| 1b | Qualified dividends | The portion of Box 1a that qualifies for the lower capital gains tax rates. It is a subset of 1a, not an additional amount. |
| 2a | Total capital gain distributions | Long-term capital gains passed through by mutual funds and REITs. This figure already includes any amounts shown in Boxes 2b, 2c, 2d, and 2f. |
| 2b | Unrecaptured Section 1250 gain | The part of a capital gain distribution tied to depreciation on real property, which can be taxed at a rate up to 25%. |
| 2c | Section 1202 gain | Gain from qualified small business stock that may qualify for special treatment under Section 1202. |
| 2d | Collectibles (28%) gain | Gain from collectibles, which can be taxed at a maximum rate of 28%. |
| 2e / 2f | Section 897 gains | Ordinary and capital gain from U.S. real property interests. Only RICs and REITs complete these boxes; most individual recipients can ignore them. |
| 3 | Nondividend distributions | Return of your own invested capital, not taxable income now. It reduces your cost basis, which raises your taxable gain when you eventually sell. |
| 4 | Federal income tax withheld | Backup withholding already sent to the IRS on your behalf. You claim it as tax already paid on your return. |
| 5 | Section 199A dividends | Qualified REIT dividends that may be eligible for the 20% qualified business income (QBI) deduction. This amount is also included in Box 1a. |
| 7 / 8 | Foreign tax paid / foreign country | Foreign tax withheld on your dividends and the country or possession it went to. This can support a foreign tax credit or deduction. |
| 9 / 10 | Cash / noncash liquidation distributions | Amounts you received when a company or fund liquidated. Reporting is required at $600 or more. |
| 11 | Exempt-interest dividends | Tax-exempt interest dividends passed through by a mutual fund, generally free of regular federal income tax but still reported. |
| 12 | Specified private activity bond interest dividends | The portion of exempt-interest dividends that can be subject to the alternative minimum tax (AMT). |
| 14 to 16 | State information | State name, state identification number, and state income tax withheld. |
The maximum 25% rate on unrecaptured Section 1250 gain and the 28% rate on collectibles gain are figured on the Schedule D worksheets rather than on the 1099-DIV itself, and the Section 199A deduction on Box 5 qualified REIT dividends (up to 20% of the amount) was made permanent for 2026 and later years by the One Big Beautiful Bill Act (Source: IRS Instructions for Schedule D (Form 1040); IRS, Qualified Business Income Deduction, irs.gov/newsroom/qualified-business-income-deduction).
Box numbering has shifted between form revisions, so it is worth checking the box titles against the current-year form the IRS posts before entering figures (Source: IRS 2025 Instructions for Form 1099-DIV).
Ordinary vs. qualified dividends
Ordinary dividends (Box 1a) are taxed as ordinary income, while qualified dividends (Box 1b) are taxed at the lower net capital gain rates. Every qualified dividend is also counted inside the Box 1a total, so the two boxes are not added together. The split is what determines your tax rate (Source: IRS Pub. 550).
To be qualified, common stock generally must be held more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. Preferred stock dividends attributable to a period longer than 366 days must be held more than 90 days during the 181-day period beginning 90 days before the ex-dividend date. Some payments never qualify, including payments in lieu of dividends on short sales and certain foreign corporation dividends (Source: IRS Pub. 550).
| Feature | Ordinary dividends (Box 1a) | Qualified dividends (Box 1b) |
|---|---|---|
| Tax rate | Ordinary income rates: 10%, 12%, 22%, 24%, 32%, 35%, 37% | Net capital gain rates: 0%, 15%, or 20% |
| Holding period | No special holding period | More than 60 days in the 121-day window around the ex-dividend date (common stock) |
| Relationship | Includes all dividends, including the qualified portion | A subset of Box 1a, not an extra amount |
The ordinary rate schedule of 10% to 37% was made permanent by the One Big Beautiful Bill Act (Pub. L. 119-21, July 2025), as reflected in Rev. Proc. 2025-32 (Source: IRS Rev. Proc. 2025-32 Section 2.01).
How 1099-DIV income is taxed in 2026
Qualified dividends (Box 1b) and capital gain distributions (Box 2a) are taxed at 0%, 15%, or 20% for 2026, with the rate set by your taxable income and filing status. The Qualified Dividends and Capital Gain Tax Worksheet stacks ordinary income first, so these amounts fill the brackets above your other income (Source: IRS Rev. Proc. 2025-32 Section 4.03).
| Filing status | 0% rate up to | 15% rate up to | 20% rate above |
|---|---|---|---|
| Married filing jointly / surviving spouse | $98,900 | $613,700 | $613,700 |
| Single | $49,450 | $545,500 | $545,500 |
| Head of household | $66,200 | $579,600 | $579,600 |
| Married filing separately | $49,450 | $306,850 | $306,850 |
| Estates and trusts | $3,300 | $16,250 | $16,250 |
These 2026 thresholds rose from 2025, when the single-filer 0% ceiling was $48,350 and the joint ceiling was $96,700 (Source: IRS Rev. Proc. 2024-40 Section 4.03). Ordinary dividends in Box 1a are instead taxed at the seven ordinary rates from 10% to 37% (Source: IRS Topic No. 404).
Dividends and capital gain distributions also count as net investment income for the 3.8% Net Investment Income Tax, which applies to the lesser of net investment income or the amount your modified adjusted gross income exceeds a fixed threshold: $250,000 for joint filers, $200,000 for single and head of household, and $125,000 for married filing separately. Those thresholds are set by statute and are not indexed for inflation (Source: 26 U.S.C. Section 1411; IRS Topic No. 559). Our Net Investment Income Tax 2026 guide covers the mechanics, and because Medicare IRMAA surcharges are based on MAGI, investment income can also be a factor in Medicare premiums for some taxpayers.
Do you file the 1099-DIV, and what about Schedule B?
You do not file the 1099-DIV itself with the IRS. The payer already sent the IRS its copy; your job is to report the same numbers on your return. Ordinary dividends flow to Form 1040 and to Schedule B when required, while capital gain distributions flow to Schedule D or directly to Form 1040 (Source: IRS Topic No. 404).
Schedule B is required when your total taxable interest plus ordinary dividends is more than $1,500 for the year; below that amount you can generally report the totals directly on Form 1040 (Source: IRS Topic No. 404).
The general reporting sequence looks like this:
- Every 1099-DIV and consolidated 1099 from each payer is gathered.
- Total ordinary dividends (Box 1a) and qualified dividends (Box 1b) go on Form 1040.
- Capital gain distributions (Box 2a) go on Schedule D or the Form 1040 line the instructions specify.
- Schedule B is added when interest plus ordinary dividends exceeds $1,500.
- Any federal tax withheld (Box 4) is claimed as tax already paid.
1099-DIV vs. 1099-INT vs. 1099-B
These three forms report different investment income, and mixing them up is a frequent filing mistake. A 1099-DIV reports dividends and distributions, a 1099-INT reports interest income, and a 1099-B reports proceeds from selling securities (Source: IRS 2025 Instructions for Forms 1099-DIV, 1099-INT, and 1099-B).
| Form | Reports | Typical source |
|---|---|---|
| 1099-DIV | Dividends and capital gain distributions | Stocks, mutual funds, ETFs, REITs |
| 1099-INT | Interest income | Bank accounts, CDs, bonds |
| 1099-B | Proceeds and gain or loss from sales | Selling stocks, bonds, or fund shares |
A single brokerage often combines all three into one consolidated 1099 statement, so you may see each section inside the same document (Source: IRS 2025 Instructions for Form 1099-DIV).
Do you report dividends under $10?
Yes. A payer is not required to issue a 1099-DIV when your dividends from that payer total less than $10, but you are still required to report every taxable dividend on your return, whether or not a form arrived (Source: IRS 2025 Instructions for Form 1099-DIV; IRS Topic No. 404). The reporting threshold for the payer is not an exemption for the taxpayer.
For example, if a brokerage account paid $7 in dividends and sent no form, that $7 still belongs on the return. A year-end account statement usually shows the figure even when a standalone 1099-DIV was not generated.
What to do if your 1099-DIV is missing or wrong
When a 1099-DIV is missing or contains an error, correcting it generally begins with the payer that issued it, because the payer must fix both its IRS filing and the recipient copy (Source: IRS 2025 Instructions for Form 1099-DIV). The underlying income generally still needs to be reported, because the IRS already holds the payer’s matching copy.
- Online tax documents in the account often post before mailing and can be checked first.
- The payer can be contacted to request a missing or corrected form.
- The boxes can be compared against a year-end statement to confirm the figures.
- The correct income is reported from available records even if the paper form has not arrived.
Income reported from available documentation stays consistent with what the IRS receives, and a corrected form issued later can be reconciled against amounts already reported.
Work with Q3 Advisors
Q3 Advisors is a registered investment adviser focused on retirement tax planning. This article is educational and is not advice; for guidance on your own circumstances, consult a qualified tax or financial professional.
Frequently asked questions
Do I have to report 1099-DIV on my taxes?
Yes. Dividends and distributions shown on a 1099-DIV are taxable income and must be reported on your Form 1040, even though you do not file the form itself. The IRS receives a matching copy from the payer, so leaving the amounts off your return can trigger a mismatch notice (Source: IRS Topic No. 404).
Do I need to report dividends less than $10?
Yes. A payer is not required to issue a 1099-DIV for dividends under $10 from that payer, but you must still report those dividends on your return. The reporting threshold applies to the payer, not to the taxpayer, so small amounts remain taxable (Source: IRS 2025 Instructions for Form 1099-DIV; IRS Topic No. 404).
What is the difference between a 1099-DIV and a 1099-B?
A 1099-DIV reports dividends and capital gain distributions paid to you, while a 1099-B reports the proceeds and gain or loss from selling securities. Dividends are income you received for holding an investment; 1099-B figures come from a sale. A brokerage may combine both on one consolidated 1099 (Source: IRS 2025 Instructions for Forms 1099-DIV and 1099-B).
Is 1099-DIV considered income?
Yes. Ordinary dividends in Box 1a and capital gain distributions in Box 2a are taxable income. Box 3 nondividend distributions are a return of your own capital and are not taxable now, though they lower your cost basis and can increase your taxable gain when you sell (Source: IRS 2025 Instructions for Form 1099-DIV).
Who sends out a 1099-DIV?
The payer sends it, generally a bank, brokerage, or mutual fund company that paid you dividends or distributions. The payer must furnish your copy by January 31 following the tax year and file a copy with the IRS. Retirement accounts such as a 401(k) or IRA do not generate a 1099-DIV (Source: IRS 2025 Instructions for Form 1099-DIV).
What happens if I don’t report my 1099-DIV?
Because the IRS has the payer’s matching copy, omitting a 1099-DIV can lead to an automated notice, additional tax, and potential interest and penalties. The IRS compares the income reported to it against your return, so unreported dividends often surface. The income remains reportable whether or not the form arrived (Source: IRS Topic No. 404).
How much do you have to make to get a 1099-DIV?
A payer must issue a 1099-DIV when it pays you $10 or more in dividends and distributions during the year, or $600 or more in a liquidation. Below $10 the payer may not send a form, but the dividends remain reportable on your return (Source: IRS 2025 Instructions for Form 1099-DIV).
Do you pay taxes on 1099-DIV?
Usually yes. Ordinary dividends are taxed at your ordinary income rates of 10% to 37%, while qualified dividends and capital gain distributions are taxed at 0%, 15%, or 20% for 2026 based on taxable income. Higher totals can also face the 3.8% Net Investment Income Tax (Source: IRS Rev. Proc. 2025-32; 26 U.S.C. Section 1411).
Sources
IRS, 2025 Instructions for Form 1099-DIV (irs.gov/instructions/i1099div).
IRS, Topic No. 404, Dividends (irs.gov/taxtopics/tc404).
IRS, Publication 550, Investment Income and Expenses (irs.gov/publications/p550).
IRS, Instructions for Schedule D (Form 1040), Unrecaptured Section 1250 Gain and 28% Rate Gain Worksheets (irs.gov/instructions/i1040sd).
IRS, Qualified Business Income Deduction (Section 199A), including qualified REIT dividends (irs.gov/newsroom/qualified-business-income-deduction).
IRS, Rev. Proc. 2025-32, Section 4.03 and Section 2.01, 2026 inflation-adjusted amounts (irs.gov/pub/irs-drop/rp-25-32.pdf).
IRS, Rev. Proc. 2024-40, Section 4.03, 2025 inflation-adjusted amounts (irs.gov/pub/irs-drop/rp-24-40.pdf).
IRS, Topic No. 559, Net Investment Income Tax (irs.gov/taxtopics/tc559); 26 U.S.C. Section 1411 (law.cornell.edu/uscode/text/26/1411).
