What is Form 1099‑DIV?
Form 1099‑DIV, Dividends and Distributions, is an IRS information return used by banks, brokerages, mutual funds and other payers to report dividends and distributions paid to U.S. taxpayers during a calendar year. It informs the taxpayer and the IRS about amounts such as ordinary dividends, qualified dividends, capital gain distributions and any federal tax withheld.
Key takeaways
– Payers must generally send Form 1099‑DIV to recipients and to the IRS. Recipients normally receive the form by January 31.
– You’ll usually receive a 1099‑DIV only if your cumulative dividends and distributions from a payer exceed $10, though payers may issue forms for smaller amounts.
– Important boxes on the form include Box 1a (total ordinary dividends), Box 1b (qualified dividends), Box 2a (total capital gain distributions), Box 3 (nondividend distributions/return of capital), Box 4 (federal income tax withheld / backup withholding) and Box 6 (foreign tax paid).
– Report the amounts shown on each 1099‑DIV on your annual tax return (Form 1040 and, if required, Schedule B and/or Schedule D/Form 8949). Qualified dividends and long‑term capital gain distributions often get preferential tax rates.
Who receives a Form 1099‑DIV?
– Individual investors and other payees who received dividends or distributions (ordinary dividends, capital gain distributions, etc.) from a payer during the year.
– A payer is generally required to issue a 1099‑DIV if the total paid to a recipient is more than $10, though they may issue it for smaller amounts.
– Accounts that are exempt from issuing a 1099‑DIV include many retirement accounts (IRAs, certain pension and profit‑sharing plans) and some tax‑exempt arrangements—because those distributions are reported under different rules.
Why didn’t I receive a 1099‑DIV even though I earned dividends?
Common explanations:
– The payer’s total dividends to you from that account were $10 or less (issuance not required).
– The dividends were paid into retirement plans or other exempt accounts.
– The payer has an incorrect address or other contact information for you.
– Dividends were reinvested in a DRIP (dividend reinvestment plan); you may still get a 1099‑DIV for reinvested amounts, but some custodians aggregate reporting differently.
If you expected a 1099‑DIV and did not receive it, contact the payer (brokerage, mutual fund, bank) first; if you still can’t resolve it by late February, you can contact the IRS for guidance.
How do I report amounts from Form 1099‑DIV on my tax return? — Step‑by‑step
1. Gather all 1099‑DIV forms. You may receive multiple 1099‑DIVs from different financial institutions—report them all.
2. Reconcile each 1099‑DIV to your account statements for the tax year to verify the amounts and to identify any missing or incorrect forms.
3. Enter the amounts on your tax return:
– Ordinary dividends (Box 1a): report on Form 1040. If you received more than $1,500 of taxable interest and/or ordinary dividends during the year, complete Schedule B (Form 1040).
– Qualified dividends (Box 1b): reported on Form 1040 and used to determine tax at the preferential long‑term capital gains rates (0%, 15%, 20% depending on your taxable income).
– Capital gain distributions (Box 2a): report on Schedule D (Form 1040) in many cases; some capital gain distributions are reported directly on Form 1040 depending on other items you have. If you have multiple capital transactions, you may also use Form 8949.
– Nondividend distributions (Box 3): generally return of capital; reduces your basis in the stock/share and may become a capital gain when you sell. Track basis adjustments.
– Federal income tax withheld / backup withholding (Box 4): enter on Form 1040 to claim credit for taxes already withheld.
– Foreign tax paid (Box 6): may be used to claim a foreign tax credit (Form 1116) or an itemized deduction in some circumstances.
4. If any 1099‑DIV is incorrect, contact the issuer and request a corrected 1099‑DIV. Don’t simply ignore incorrect amounts—report what is correct and keep documentation of communications.
5. Keep records: account statements, cost basis records, correspondence with the payer, and copies of the 1099‑DIV forms.
Filing thresholds and Schedule B
– If you received more than $1,500 of taxable interest and/or ordinary dividends in the year, you must complete Schedule B (Interest and Ordinary Dividends) and attach it to Form 1040. Schedule B also asks about foreign accounts and whether you had a foreign person assist with income.
Practical examples
– Example 1 (simple): You receive a 1099‑DIV showing $600 in Box 1a (ordinary dividends) and $150 in Box 1b (qualified dividends). Report $600 in ordinary dividends on Form 1040 and note $150 of them qualify for preferential tax rates. If your total ordinary dividends for the year are under $1,500, Schedule B is not required.
– Example 2 (capital distributions): A mutual fund reports $2,000 in Box 2a (capital gain distributions). You’ll generally report this on Schedule D (and possibly Form 8949) and pay the capital gains tax rate that applies for long‑term capital gains.
For payers: how to file Form 1099‑DIV with the IRS (overview)
– Payers (financial institutions, corporations that distribute dividends) must furnish a copy of Form 1099‑DIV to each recipient (normally by January 31).
– Payers must also file copies with the IRS. Filing deadlines and formats can change; the IRS allows electronic filing (FIRE system) and has different deadlines for paper vs. electronic filing. Use the IRS Instructions for Form 1099‑DIV and the General Instructions for Certain Information Returns for current filing deadlines, electronic filing rules, and penalties for missing or incorrect filings. For large filers, electronic filing is required.
– Payers may also need to satisfy state filing requirements if state tax was withheld (state entries appear on the form).
Where to get the form and official instructions
– Form 1099‑DIV and its official instructions are available on the IRS website: https://www.irs.gov/forms-pubs/about-form-1099-div
– Instructions for payers and important filing rules are on the IRS site (see the Instructions for Form 1099‑DIV and General Instructions for Certain Information Returns).
Special topics
– FATCA / foreign accounts: If you have foreign accounts or holdings, different reporting requirements may apply (FATCA, FBAR). Foreign taxes paid (Box 6) may be eligible for a foreign tax credit; consult IRS resources or a tax professional.
– Retirement accounts: Distributions from certain retirement accounts are not reported on Form 1099‑DIV; they are covered by other forms (e.g., Form 1099‑R for retirement distributions).
– Backup withholding: If you did not provide a correct taxpayer identification number (TIN) to the payer, or if the IRS has notified the payer to apply backup withholding, the payer may report amounts withheld in Box 4.
If you don’t receive a 1099‑DIV but should have
Practical steps:
1. Wait until late January: issuers generally must furnish by January 31.
2. Contact the payer/issuer to request a copy. Confirm they have your correct address and Social Security number/TIN.
3. If the payer says no form was issued but you know you received dividends > $10, ask them to recheck—some issuers consolidate reporting or issue corrected statements later.
4. If you cannot obtain the 1099‑DIV and the amounts are material, keep your own statements and report the income on your tax return. Document your efforts to get the form. If necessary, contact the IRS for further guidance.
When to consult a tax professional
– If you have large or complex dividend and capital gain activity, foreign tax issues, multiple corrected 1099‑DIVs, or questions about basis adjustments (nondividend distributions), a CPA or tax preparer can help ensure accurate reporting and optimal tax treatment.
Sources and further reading
– IRS, About Form 1099‑DIV, Dividends and Distributions: https://www.irs.gov/forms-pubs/about-form-1099-div
– IRS, Instructions for Form 1099‑DIV (specific instructions and exceptions): https://www.irs.gov/instructions/i1099div
– IRS, About Schedule B (Form 1040), Interest and Ordinary Dividends: https://www.irs.gov/forms-pubs/about-schedule-b-form-1040
– IRS, Topic No. 404 Dividends: https://www.irs.gov/taxtopics/tc404
– IRS, Topic No. 409 Capital Gains and Losses: https://www.irs.gov/taxtopics/tc409
– IRS, Summary of FATCA Reporting for U.S. Taxpayers: https://www.irs.gov/businesses/corporations/summary-of-fatca-reporting-for-u-s-taxpayers
If you’d like, I can:
– Walk through where each box on a 1099‑DIV maps to lines on Form 1040 and Schedule D for your specific tax year.
– Help you draft a request to a payer for a missing or corrected 1099‑DIV.