Dividend Tax Calculator
Estimate your total tax on qualified and non-qualified dividend income based on your tax bracket.
How Dividends Are Taxed
The IRS taxes dividends differently depending on whether they are "qualified" or "non-qualified." Qualified dividends come from US corporations (and certain foreign ones) where you have held the stock for at least 60 days. They receive preferential tax rates matching long-term capital gains: 0%, 15%, or 20%.
Non-qualified (ordinary) dividends are taxed at your regular income tax rate, which can be as high as 37%. Examples include dividends from REITs, money market accounts, and short-term holdings.
Frequently Asked Questions
How much tax do you pay on dividends?
It depends on the type of dividend and your income level. Qualified dividends are taxed at 0%, 15%, or 20% based on your taxable income. Non-qualified dividends are taxed at your ordinary income rate, which ranges from 10% to 37%. High earners may also owe an additional 3.8% Net Investment Income Tax.
How can I avoid or reduce dividend tax?
You can hold dividend stocks in tax-advantaged accounts like a Roth IRA (tax-free growth) or traditional IRA/401k (tax-deferred). If investing in taxable accounts, hold stocks long enough for dividends to qualify for the lower rate. Tax-loss harvesting against other gains can also offset the tax impact.