Qualified Dividends

In general, any dividend you receive during 2007 is a qualified dividend for the lower tax rates on dividends.

Some dividends are excluded from the lower rates, however. They are:

  • Dividends paid on stock held less than 60 days out of the 120 days before and after the ex-dividend date

  • Dividends from credit unions

  • Dividends from tax-exempt corporations

  • Dividends paid by a foreign corporation, unless the corporation is traded on an established U.S. market, incorporated within a U.S. possession, or eligible for the benefits of a comprehensive U.S. treaty

  • Dividends paid by certain savings institutions on deposits

  • Dividends paid on certain ESOP (employee stock ownership plan) stock

  • Dividends from a mutual fund or REIT qualify if the mutual fund or REIT meets certain eligibility tests. Your mutual fund or REIT should advise you as to whether or not dividends paid to you are qualified.