1099-DIV
An IRS information return issued by brokers and mutual fund companies to report dividends, capital gain distributions, and other investment income paid to investors during the tax year.
Form 1099-DIV ('Dividends and Distributions') is the primary document investors use to report investment income from stocks, mutual funds, ETFs, and money market funds. It is issued by any financial institution that paid dividends of $10 or more during the year and must be furnished to both the investor and the IRS by February 15 following the tax year.
The form contains several critical boxes. Box 1a reports total ordinary dividends, the full amount that must be included in income at ordinary rates unless it qualifies for preferential treatment. Box 1b reports the qualified dividend portion — the subset eligible for the 0%/15%/20% long-term capital gains rates. Box 2a reports capital gain distributions from mutual funds and REITs (taxed at long-term rates even though you did not personally sell shares). Box 2b breaks out unrecaptured Section 1250 gain, which is taxed at a maximum 25% rate and arises from REIT distributions attributable to depreciation recapture.
Box 3 shows nondividend distributions (return of capital), which are not currently taxable but reduce the investor's cost basis in the fund or stock. If cumulative return-of-capital distributions bring basis below zero, the excess becomes a capital gain. Box 4 records federal income tax withheld (from backup withholding). Box 5 shows Section 199A dividends — the REIT/pass-through dividends eligible for the 20% deduction under the Tax Cuts and Jobs Act. Box 7 reports foreign tax paid, which may be claimed as a credit or deduction on Form 1116 or Schedule A.
Investors who own mutual funds across multiple accounts may receive several 1099-DIV forms from the same fund family if accounts are held separately. All 1099-DIV amounts must be aggregated and reported on Schedule B (for ordinary dividends and interest exceeding $1,500), with capital gain distributions flowing to Schedule D (or directly to Form 1040 if Schedule D is not otherwise required). Reviewing each box carefully ensures that qualified dividends receive the correct lower rate rather than being inadvertently taxed at ordinary rates.