What Form 1099-DIV (2017) Is For
IRS Form 1099-DIV (2017) reports dividend income and other distributions that financial institutions paid during the calendar year. The form includes ordinary dividends, qualified dividend income, capital gain dividends, exempt interest dividends, nondividend distributions, and cash or noncash liquidation distributions. These payments reported help determine taxable income for the tax return.
Financial institutions issue the form when dividends paid reach the reporting threshold, when foreign tax is withheld, or when backup withholding rules apply. The information helps taxpayers report dividends accurately, including qualified dividends, total ordinary dividends, total capital gain distributions, and dividends paid directly from mutual funds, money market funds, regulated investment companies, domestic corporations, or qualified REIT dividends paid.
When You’d Use Form 1099-DIV
A taxpayer uses Form 1099-DIV when reporting distributions that increase the recipient’s gross income, such as ordinary income, qualified dividend income, or total capital gain distribution amounts. The form is also required when investment expenses are reported in distributions from mutual funds, preferred stock, qualified small business stock, or other financial institutions.
Taxpayers must file form details when more than one form is received, when multiple accounts exist, or when the payer issues a corrected form due to an incorrect TIN. Reporting is required whether dividends were paid directly or reinvested; amounts reported must match the statements to avoid further notices from the IRS.
Key Rules or Details for 2017
For tax year 2017, taxpayers were required to report dividend income, even if the amount received was small or issued through noncash distributions. Qualified dividends entered on the form received reduced capital gains rates when sourced from domestic corporations or qualified foreign corporations, and when the holding period rules around the ex-dividend date were met.
Foreign tax paid to a foreign country, state income tax withheld, or withheld federal income tax also needed to be included. Additional rules apply to FATCA filing requirement checks, reporting specified private activity bonds, specific depreciable real property, other property, and other distributions under the Internal Revenue Code.
For complete details on reporting, withholdings, and tax filings, see our guide for Information Returns & Reporting Forms.
Step-by-Step (High Level)
Step 1: Gather all forms
A taxpayer must collect every Form 1099-DIV received for tax year 2017, including forms from multiple accounts and other financial institutions.
Step 2: Review each box on the form
A taxpayer must read each box carefully to confirm that all amounts reported are accurate, including total ordinary dividends, qualified dividends, total capital gain distributions, foreign tax, exempt interest dividends, state income tax withheld, and FATCA filing requirement indicators.
Step 3: Report dividends on the tax return
A taxpayer must report dividend income on the correct lines of Form 1040. The taxpayer must accurately report dividends, including ordinary dividends, qualified dividends, and total capital gain distributions. A taxpayer must claim foreign tax credits or deductions when applicable.
Step 4: Handle reinvested or noncash distributions
A taxpayer must treat reinvested dividends as income because these amounts increase the taxpayer’s taxable income even when no cash is received. A taxpayer must use fair market value when reporting noncash distributions.
Step 5: Attach additional forms when required
A taxpayer must file Form 1116 when the foreign tax exceeds the threshold. A taxpayer must follow electronic filing requirements when using e-file systems.
Step 6: Keep accurate records
A taxpayer must store all documents, including payee-provided information and account number identifiers, with tax records for at least three years.
Common Mistakes and How to Avoid Them
- Failing to report all Forms 1099-DIV: Report every 1099-DIV you receive, even for small amounts, and reconcile totals against brokerage statements to avoid IRS mismatch notices.
- Double-counting qualified dividends: Report Box 1a as total ordinary dividends and treat Box 1b as the qualified portion included in Box 1a, not an additional amount.
- Ignoring corrected Forms 1099-DIV: Use the corrected form for final reporting and file Form 1040-X if the changes affect what you already filed.
- Misunderstanding nondividend distributions: Track nondividend distributions as cost-basis reductions rather than taxable income to prevent capital gain errors when the investment is sold.
- Overlooking reinvested or complex dividend-related transactions: Include reinvested dividends as taxable income and review short sales, property distributions, or other complex items carefully to ensure gains and losses are reported correctly.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
Once the tax return is submitted, the IRS compares the amounts reported with the data provided by financial institutions that issue each Form 1099-DIV. If discrepancies are found, further notices may be issued to request clarification or documentation regarding account number details, payments, or payee-provided information.
If adjustments are needed, the taxpayer may need to amend tax returns, correct gain entry amounts, or revise reporting for nonresident aliens or short sales. The IRS may also review electronic filing entries, e-file submissions, or file form corrections when mismatches occur.
FAQs
What information does IRS Form 1099-DIV (2017) report?
IRS Form 1099 DIV 2017 reports dividend income, ordinary dividends, qualified dividend income, capital gain dividends, exempt interest dividends, and other distributions paid by financial institutions. The form also includes foreign tax, state income tax withheld, and withheld federal income tax amounts reported for the tax year.
Do dividends paid on mutual funds and money market funds affect taxable income?
Dividends paid from a mutual fund or money market fund increase taxable income because they are treated as ordinary income or qualified dividends. Total capital gain distributions, qualified REIT dividends paid, and nondividend distributions may also affect the recipient’s gross income on the tax return.
How do backup withholding rules affect the amounts reported on Form 1099-DIV?
Backup withholding rules apply when a taxpayer identification number is missing or incorrect, resulting in withheld federal income tax. Financial institutions report payments withheld on the form, and taxpayers must include only the amount withheld as a credit toward federal income tax when filing tax returns.
What should a taxpayer do when more than one Form 1099-DIV is received?
A taxpayer receives more than one form when multiple accounts exist or when dividends are paid directly from different financial institutions. Each form must be reviewed to ensure accurate reporting of distributions, total ordinary dividends, total capital gain distributions, and any foreign country or state income tax withheld entries.
Are noncash liquidation distributions and other property distributions reported differently?
Noncash liquidation distributions, other property, and payments involving preferred stock or qualified small business stock must be reported using fair market value. These reporting requirements follow Internal Revenue Code rules and may impact gain, interest amounts, investment expenses, and other income-inclusive distributions.
For more resources on filing or understanding prior-year IRS forms, visit our Form Summaries and Guides Library or see our IRS assistance guide.
