Takeaways
- Form 1099-DIV is an IRS document sent to taxpayers who have received dividends.
- Form 1099-DIVs are sent to taxpayers and the IRS by brokerages and banks.
- Form 1099-DIVs must be sent by January 31 for the prior year’s dividends.
- Taxpayers must earn more than $10 in dividends to receive Form 1099-DIVs
- Form 1099-DIVs can be uploaded to online tax software programs to complete your Form 1040.
What Is Form 1099-DIV?
Form 1099-DIV is an Internal Revenue Service (IRS) tax document reporting the dividends and distributions paid to you throughout the tax year. The form captures dividend payments over $10 from dividend-paying stocks, REITs, and other sources of dividends.
Form 1099-DIVs are issued by online stock brokerage accounts, banks, and other financial institutions that have paid dividends or other qualifying distributions to taxpayers.
Take the Next Step:
H&R Block Website
H&R Block Online Tax Software
Smart Money Rating: 5/5
Current Offer: 20% Off Online Tax Prep
Best For: Individual Tax Filing
How a Form 1099-DIV Works
The Form 1099-DIV reports the total dividends received, capital gains distributions, and any other income you earn from investments. The IRS uses this form to keep track of all taxable additional income. It is your job to report it accurately and pay taxes accordingly.
Read More -> What Is a Form 1099?
For those with income from stocks, mutual funds, and other investments, the 1099-DIV form is a vital document that summarizes your dividend income for the year and outlines how much money you have made. The institution holding your investments sends you a form 1099-DIV, also filed with the IRS.
Try This -> 7 Steps to File Your Taxes
Example of Form 1099-DIV
Source: IRS Website [1]
Take the Next Step:
FreeTax Website
Free Tax USA
Our Rating: 4.5/5
Federal Filing Fee: $0
State Filing Fee: $14.99
Best For: Free Federal Filing and Simple Tax Returns
When Do You Get a 1099-DIV?
You will typically receive a form 1099-DIV by January 31st of the year following the tax year in which you were paid dividends, so if you were paid dividends or income from your investments at any time during 2024. In that case, you should expect to receive a Form 1099-DIV by January 31st, 2025.
The financial institution or brokerage holding your investments must mail or electronically deliver the form to you by this date. This gives you ample time to review the information, ensure it is correct, and file your taxes by the annual April 15th deadline.
Learn More -> 2024-2025 Income Tax Rates and Brackets
You should check your email inbox or physical mailbox for these forms. If you have yet to receive your 1099-DIV by mid-February, contact the financial institution to ensure they have your correct address or email and that the form was issued on time.
You Might Also Like:
5 Dividend Generating Investments
Form 1099-DIVs are primarily used to report income from investments that generate dividend income. Dividend income is particularly appealing to fixed-income investors who earn a share of a company’s profits by being common stock shareholders.
Companies can also decide whether to offer dividends, even if they have in the past. For example, during the COVID-19 pandemic, almost 200 publicly traded U.S. companies stopped paying dividends.[2]
Smart Tip:
Dividend payments are not guaranteed like those of fixed-interest-rate savings products, such as certificates of deposits.
1. Stocks: About 80% of the large-cap stocks in the S&P 500 are dividend stocks.[3] Stocks, particularly those of established companies, often pay dividends to shareholders to share profits. These dividends are typically paid quarterly, although some companies may pay annually or semi-annually. (Read more about how to invest in dividend-paying stocks).
2. Mutual Funds: Mutual funds pool money from investors to invest in various securities, such as stocks, bonds, or other assets. Some mutual funds pay dividends based on the income they generate within the fund, such as interest payments from bonds or dividends from stocks. (Read more about how to invest in mutual funds).
3. Exchange-Traded Funds (ETFs): Similar to mutual funds, ETFs are collections of various stocks or bonds that can be traded on an exchange. ETFs often pay dividends from income generated by the underlying securities. The dividends received from ETFs are generally reported on Form 1099-DIV. (Read more about how to invest in ETFs).
4. Real Estate Investment Trusts (REITs): REITs own, operate, or finance real estate that produces income. They are required by law to distribute at least 90% of their taxable income to shareholders in the form of dividends. These distributions are reported on Form 1099-DIV. (Read more about how to invest in REITs).
5. Bonds: While bonds typically pay interest rather than dividends, some types of bonds, such as municipal bonds or corporate bonds, may also generate income that is reported on Form 1099-DIV if the bondholder receives a distribution. (Read more about the different types of bonds).
Take the Next Step:
Acorns Website
Acorns Investing App
Smart Money Rating: 5/5
Intro Offer: $20 Bonus Investment
Best For: Beginner Investors
Annual Fee: N/A
Do I Have to Pay Tax on 1099-DIV Income?
Yes, the IRS requires taxpayers to report all sources of income, including dividends, on their tax returns. The information on Form 1099-DIV helps you report dividend income accurately and pay the correct amount of tax.
Read More -> 2024 Capital Gains Taxes Rates
If you have received dividends or distributions from different financial institutions, you may receive multiple 1099-DIV forms. It is essential to report the information from all these forms on your tax return. Underreporting your income may lead to additional taxes and penalties.
Smart Summary
A form 1099-DIV reports any income you received throughout the year from dividends. Investments commonly generate dividend income for shareholders and investors. Like other tax forms, you should receive Form 1099-DIV by January 31st to give you enough time to file your tax return. Use your Form 1099-DIV income to file your taxes and ensure completeness of taxable income accurately.
You Might Also Like:
(1) Internal Revenue Service. Form 1099-DIV Dividends and Distributions. Last Accessed January 12, 2025.
(2) The Wall Street Journal. Big Companies Remain Dividend Holdouts Four Years After Pandemic Began. Last Accessed January 12, 2025.
(3) Charles Schwab. Why and How to Invest in Dividend-Paying Stocks. Last Accessed January 12, 2025.
