Form 1099-DIV: Dividends and Distributions (2019 Tax Year)

What the Form Is For

Form 1099-DIV is the tax document you'll receive if you earned money from investments during 2019. Think of it as a report card from banks, brokerage firms, mutual funds, and other financial institutions that shows exactly how much dividend income they paid you throughout the year.

You should receive Form 1099-DIV if you received:

$10 or more in dividends, capital gain distributions, or other distributions from stocks or mutual funds
Any amount where foreign taxes were withheld on your dividends
$600 or more as part of a corporate liquidation (when a company closes and distributes assets)

The form breaks down different types of investment income into specific boxes—ordinary dividends (Box 1a), qualified dividends eligible for lower tax rates (Box 1b), capital gain distributions (Box 2a), and several other categories. Each type of income has different tax implications, which is why they're reported separately. Financial institutions must send you this form by January 31, 2020 for the 2019 tax year, and they send a copy to the IRS too, so it's important that your tax return matches what's reported. IRS Instructions for Form 1099-DIV

When You’d Use Form 1099-DIV (Including Late and Amended Situations)

Normal Filing Timeline

You'll typically receive Form 1099-DIV in January or early February 2020 for your 2019 income. You use this form when preparing your 2019 tax return, which is due April 15, 2020 (or October 15, 2020 if you file an extension).

Late Filing Situations

Sometimes you might receive a corrected Form 1099-DIV after you've already filed your return. This happens when the financial institution discovers an error in the original form—you'll receive a new form marked "Corrected." If the correction changes your tax liability, you'll need to file an amended return using Form 1040-X. IRS Publication 550

Amended Return Scenarios

You might need to amend your 2019 return if you:

Discover you forgot to include a 1099-DIV you received
Receive a corrected 1099-DIV showing different amounts
Realize you incorrectly reported qualified dividends as ordinary dividends (or vice versa)
Made errors calculating capital gain distributions

Special December/January Rule

There's an unusual timing rule for mutual funds and REITs (Real Estate Investment Trusts). If they declared a dividend in October, November, or December 2019 but actually paid it in January 2020, it's still reported on your 2019 Form 1099-DIV. The IRS treats it as if you received it December 31, 2019, even though you got the money in the new year. This can be confusing if you're reconciling your bank statements. IRS Instructions for Form 1099-DIV

Key Rules or Details for 2019

The $10 Reporting Threshold

Financial institutions only issue Form 1099-DIV if your dividends total $10 or more for the year. However—and this is crucial—even if you don't receive a form because your dividends were under $10, you're still legally required to report all dividend income on your tax return. The IRS doesn't give you a free pass on small amounts. IRS Publication 550

Qualified vs. Ordinary Dividends

One of the most important distinctions on Form 1099-DIV is between ordinary dividends and qualified dividends. Qualified dividends (Box 1b) get preferential tax treatment—they're taxed at capital gains rates (0%, 15%, or 20% depending on your income), which are generally lower than ordinary income tax rates. To qualify, the dividends must come from U.S. corporations or certain foreign corporations, and you must have held the stock for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date. This holding period rule is designed to prevent people from buying stock just before the dividend date to get the tax break. IRS Instructions for Form 1099-DIV

Section 199A Dividends (New for 2019)

Box 5 on the 2019 form shows "Section 199A dividends," which relates to the qualified business income deduction created by tax reform. These are dividends from Real Estate Investment Trusts (REITs) and certain mutual funds that may qualify for an additional deduction on your return. IRS Instructions for Form 1099-DIV

Backup Withholding

If you didn't provide your correct Social Security Number or Tax Identification Number to your broker, or if you underreported interest and dividends in the past, the financial institution may have withheld 24% of your dividends as backup withholding. This shows up in Box 4 and counts as a tax payment—like having taxes withheld from a paycheck. IRS Instructions for Form 1099-DIV

Step-by-Step (High Level)

Step 1: Gather All Your Forms

Collect every Form 1099-DIV you receive. If you have accounts at multiple institutions, you'll get multiple forms. Don't start your taxes until you're certain you have them all—usually by mid-February.

Step 2: Report Ordinary Dividends

Look at Box 1a (Total Ordinary Dividends). Report this amount on Line 3b of Form 1040 or 1040-SR. If your total ordinary dividends exceed $1,500 from all sources combined, you must also complete Schedule B and attach it to your return. IRS Publication 550

Step 3: Report Qualified Dividends

Box 1b shows qualified dividends (which are also included in Box 1a—don't double-count them). Report qualified dividends on Line 3a of Form 1040 or 1040-SR. These dividends receive favorable tax treatment through the Qualified Dividends and Capital Gain Tax Worksheet.

Step 4: Handle Capital Gain Distributions

Box 2a shows capital gain distributions from mutual funds. Report these on Line 6 of Schedule D if you're filing that schedule, or Line 6 of Form 1040/1040-SR if you're not required to file Schedule D. These are always long-term capital gains regardless of how long you held the mutual fund shares. IRS Instructions for Form 1099-DIV

Step 5: Report Backup Withholding

If Box 4 shows federal income tax withheld (backup withholding), report this on Form 1040/1040-SR where indicated for federal tax withheld. This is a credit against your tax liability.

Step 6: Address Foreign Taxes

If Box 7 shows foreign taxes paid, you may be able to claim a foreign tax credit or deduction. This requires Form 1116 for the credit or reporting on Schedule A if you itemize and choose the deduction.

Common Mistakes and How to Avoid Them

Mistake #1: Forgetting to Report Small Amounts

Many taxpayers assume that if they didn't receive a 1099-DIV (because they earned less than $10 in dividends), they don't need to report the income. Wrong! All dividend income is taxable, even if there's no form. Check all your brokerage and bank account statements to identify any unreported dividends. IRS Publication 550

Mistake #2: Double-Counting Qualified Dividends

Box 1b (Qualified Dividends) is a subset of Box 1a (Total Ordinary Dividends), not in addition to it. If you add Box 1a and Box 1b together, you're reporting your dividends twice. Only Box 1a goes on the "ordinary dividends" line; Box 1b goes on the separate "qualified dividends" line.

Mistake #3: Confusing Nondividend Distributions

Box 3 shows nondividend distributions, which are returns of your investment capital, not taxable income. These reduce your cost basis in the investment rather than being reported as income. Many people mistakenly add these to their dividend income. IRS Instructions for Form 1099-DIV

Mistake #4: Not Applying the Holding Period for Qualified Dividends

Just because dividends appear in Box 1b doesn't necessarily mean they all qualify for the preferential rate. If you bought and sold stocks frequently, you might not have held them for the required 60-day period. Review your trading history, especially if you're an active trader.

Mistake #5: Ignoring Multiple 1099-DIVs

If you have several brokerage accounts or invest with different companies, you'll receive multiple 1099-DIVs. You must report them all. Create a simple spreadsheet to track each form's amounts by box number to ensure nothing is missed.

Mistake #6: Mishandling Mutual Fund Distributions from Late December

Remember that special rule: dividends declared in October-December 2019 but paid in January 2020 are still reported on your 2019 return. Don't try to wait until 2020 to report them just because the cash arrived in January. The Form 1099-DIV will show them as 2019 income. IRS Instructions for Form 1099-DIV

Mistake #7: Missing Foreign Tax Opportunities

If Box 7 shows foreign taxes paid on your dividends, you're entitled to either a tax credit (using Form 1116) or a deduction (on Schedule A if you itemize). Many taxpayers miss this benefit simply because they don't realize they can claim it.

What Happens After You File

IRS Matching Process

After you file your 2019 tax return, the IRS receives copies of all your Forms 1099-DIV from your financial institutions. Their computers automatically match what you reported on your return against what the institutions reported. This matching usually occurs several months after you file—often in the summer or fall.

If Everything Matches

If your reported dividends match the 1099-DIVs on file, you won't hear anything from the IRS about this issue. Your return processing continues normally, and you'll receive any refund due.

If There's a Discrepancy

If the IRS finds that you underreported dividend income, you'll receive a CP2000 notice (typically 12-18 months after you file). This isn't technically an audit, but rather a "proposed adjustment" notice. It will show the dividends the IRS has records for versus what you reported, along with proposed additional taxes, penalties, and interest. You'll have the opportunity to respond, either agreeing with the adjustment or explaining why the IRS information is incorrect (for example, if you received a corrected 1099-DIV after filing). IRS General Instructions for Certain Information Returns

Backup Withholding Consequences

If you continue to have problems with incorrect or missing Social Security Numbers on your accounts, or if you underreport dividends repeatedly, the IRS can require financial institutions to continue backup withholding on your accounts. This means 24% of all future dividends will be automatically withheld until you resolve the issue.

Future Year Considerations

The information from your 2019 Form 1099-DIV may affect future tax years. For example, nondividend distributions (Box 3) reduce your cost basis in the stock. When you eventually sell that stock, you'll need to know your adjusted basis to correctly calculate your capital gain or loss. Keep your 1099-DIVs for at least three years after filing, and longer if you still own the investments.

FAQs

Q1: I received a 1099-DIV for an account I share with my spouse. Do we both report it?

No. For joint accounts, the financial institution reports all the dividends under one person's Social Security Number (usually the primary account holder). Only that person reports the income if you file separately. If you file jointly, it doesn't matter since all income is combined anyway. However, if it's truly a joint account where you each own half and file separately, each of you should report half the dividends, with the primary account holder listing the total and the other showing their portion with a nominee designation. IRS Publication 550

Q2: What's the difference between ordinary dividends and qualified dividends, and why does it matter?

Ordinary dividends (Box 1a) are taxed at your regular income tax rate, which in 2019 could be as high as 37%. Qualified dividends (Box 1b) receive favorable tax rates—0%, 15%, or 20% depending on your income level—similar to long-term capital gains. The qualification depends on the type of corporation paying the dividend and how long you held the stock. Most dividends from U.S. corporations held for more than 60 days qualify, but your broker does the calculation and reports them correctly. IRS Instructions for Form 1099-DIV

Q3: I reinvested my dividends automatically. Do I still have to report them?

Absolutely yes. Even if you never saw the cash because it was automatically reinvested to buy more shares, the dividends are still taxable income in the year they were paid. The reinvestment is treated as if you received the cash and then immediately used it to purchase additional shares. Important: when you reinvest dividends, they increase your cost basis in the investment, which will reduce your capital gain when you eventually sell. IRS Publication 550

Q4: My 1099-DIV shows capital gain distributions in Box 2a. I never sold anything—what is this?

Capital gain distributions commonly come from mutual funds. The fund manager buys and sells stocks within the fund throughout the year. When they sell stocks at a profit, they're required to distribute those capital gains to shareholders (you) at least annually. You'll receive these distributions even if you never sold a single share of the mutual fund yourself. These are always treated as long-term capital gains, regardless of how long you've owned the fund. IRS Instructions for Form 1099-DIV

Q5: Box 3 shows "nondividend distributions." What do I do with this?

Nondividend distributions represent a return of your original investment capital, not earnings. They're generally not taxable, but they reduce your cost basis in the stock. Think of it like getting back part of your original investment. When you eventually sell the stock, this reduced basis means you'll have a larger capital gain (or smaller loss). Keep careful records of these distributions to correctly calculate your gain or loss at sale time. IRS Instructions for Form 1099-DIV

Q6: I moved during 2019. Some of my 1099-DIVs went to my old address and I never received them. Am I still responsible?

Yes, you're required to report all dividend income whether you received the form or not. Contact your financial institutions immediately to get copies of any 1099-DIVs sent to your old address. Most institutions provide tax documents online through their websites, which you can access even if the paper form went to the wrong address. Failure to report income because you didn't receive the form isn't a valid excuse if the IRS has a record of it.

Q7: What should I do if I receive a corrected 1099-DIV after I've already filed my tax return?

First, compare the corrected form to the original. If the changes are minor and don't affect your tax liability significantly (a few dollars), the IRS may not require an amendment. However, if the changes are substantial or affect which box amounts were reported, you should file an amended return using Form 1040-X. You have up to three years from the original filing deadline to file an amendment. Corrected 1099-DIVs most commonly occur when mutual funds recalculate their qualified dividend percentages or capital gain distributions. IRS Publication 550

Remember: Form 1099-DIV is one of the most common tax forms, but its various boxes and categories can be confusing. The key is to report each type of income in the correct place on your return. When in doubt, consult IRS Publication 550 (Investment Income and Expenses) for detailed guidance, or consider working with a tax professional, especially if you have complex investment situations involving foreign investments, partnerships, or substantial trading activity. All IRS forms, instructions, and publications are available free at IRS.gov.

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