Qualified dividends are taxed at the lower long-term rates: 0%, 15% or 20%, based on your taxable income. Ordinary dividends are taxed at your regular income tax rate, from 10% to 37%. Most dividends from U.S. companies qualify if you have held the shares for more than 60 days around the payout. REIT payouts and money market interest usually do not.
How they stack up
General ranges, not a rating of any specific investment. Yields and rates change over time.
Which fits when
- Dividends from most U.S. companies and many foreign ones
- Shares held more than 60 days around the ex-dividend date
- Reported in box 1b of your 1099-DIV
- Most REIT dividends
- Money market fund and bond fund payouts
- Shares sold too soon after buying
2026 qualified dividend tax brackets
For tax year 2026 (the return you file in 2027), qualified dividends are taxed at 0% if your taxable income is up to $49,450 single or $98,900 married filing jointly. The 15% rate applies up to $545,500 single or $613,700 jointly. Above that, the rate is 20%. Higher earners may also owe a 3.8% net investment income tax once modified adjusted gross income passes $200,000 single or $250,000 jointly.
These thresholds come from the IRS and change every year with inflation.
The holding rule in plain English
To count as qualified, you need to have owned the shares for more than 60 days during the 121-day window that starts 60 days before the ex-dividend date. If you buy and hold for the long run, you will almost always meet it. It mostly catches people who buy just to grab a dividend and sell right after.
Where you see it
Your brokerage sends a Form 1099-DIV early each year. Box 1a shows all your ordinary dividends, and box 1b shows the part of that total that is qualified. Inside a Roth IRA or other retirement account, none of this matters year to year, because dividends are not taxed when they are paid. See What Is a 1099-DIV?
Questions people ask
Are all dividends from stocks qualified?
Most dividends from U.S. companies qualify if you meet the holding period. Some do not, including most REIT dividends and payouts from certain foreign companies.
Can I pay 0% tax on dividends?
Yes. For 2026, qualified dividends are taxed at 0% federally if your taxable income is up to $49,450 single or $98,900 married filing jointly. State taxes may still apply.
Are REIT dividends qualified?
Usually not. Most REIT dividends are taxed as ordinary income, although a special deduction can lower the tax on part of them.
More side-by-sides
Keep reading: How Are Dividends Taxed? · Not All Dividends Are Created Equal
For education only and not personalized investment, tax or legal advice. Ranges are general illustrations, not a prediction or a promise of results. All investing involves risk, including the possible loss of principal. Tax rules change; check current IRS figures or a tax professional for your situation.