Ads end in 20 seconds
This content is free thanks to our sponsors
Sponsored Ad – I may earn a commission if you click and buy
Finance
Qualified Dividend
A dividend that meets certain rules and is taxed at the lower long-term capital gains rate instead of ordinary income tax rates.
Qualified dividends must come from a company that meets holding-period and other requirements. They are reported on tax returns separately from ordinary dividends. The tax saving can be significant for higher-rate taxpayers.
It's the government's way of saying 'this dividend is from a good company, so we'll tax it more gently'.
Real world: Dividends from most large US or UK companies held for more than 60 days qualify for the lower tax rate. This makes holding quality dividend stocks more attractive for long-term investors.
💡 Qualified dividends are the tax-friendly version of dividend income.