Form 1099-DIV 2013 Checklist
Purpose and Reporting Scope
Form 1099-DIV reports dividends, capital gain distributions, and nondividend distributions paid to recipients during 2013. The 2013 tax year continues reporting of qualified dividends at preferential capital gains rates under current law. Filers must distinguish ordinary dividends (Box 1a) from qualified dividends (Box 1b) and report section 1202 gain exclusions (Box 2c) for eligible small business stock distributions.
Recipient Identification and TIN Verification
Verify the recipient's complete taxpayer identification number, which may be a Social Security Number, Individual Taxpayer Identification Number, or Adoption Taxpayer Identification Number, and confirm the matching name and address on file. The 2013 form permits display of only the last four digits on Copy B to the recipient, while the full number remains on file with the IRS.
Box 1a and Box 1b: Ordinary and Qualified Dividends
Report total ordinary dividends in Box 1a and separately identify the qualified dividend portion in Box 1b. The Box 1b amount must not exceed the Box 1a amount and represents dividends eligible for preferential capital gains rates of 0 percent, 15 percent, or 20 percent under the 2013 tax law.
Recipients use the Box 1b figure to calculate their qualified dividend tax rate based on their income level. High-income taxpayers may also owe the 3.8 percent Net Investment Income Tax on qualified dividends reported in Box 1b.
Box 2a Through Box 2d: Capital Gain Distribution Components
Enter total capital gain distributions in Box 2a and allocate components in the following boxes. Box 2b reports unrecaptured Section 1250 gain, which represents depreciation recapture on real property subject to a maximum 25 percent tax rate.
Box 2c reports Section 1202 small business stock gain; the exclusion percentage depends on when the recipient acquired the stock, with rates of 50 percent, 75 percent, or 100 percent applying based on the acquisition date. Box 2d reports collectibles gain, which remains subject to a 28 percent maximum rate under 2013 tax rules.
Box 3: Nondividend Distributions
Report nondividend distributions, also known as return of basis, in Box 3. Recipients must reduce their cost basis by this amount when calculating gain or loss on future stock sales. Nondividend distributions are not taxable until the recipient's basis reaches zero, at which point any excess becomes a taxable capital gain.
Box 4: Federal Income Tax Withheld
Include backup withholding amounts in Box 4. Backup withholding applies if the recipient failed to provide a taxpayer identification number or if the IRS notified the payer of an incorrect number. Recipients include this amount on their income tax return as withheld tax and may claim it as a credit against their total tax liability.
Box 5: Investment Expenses
Report investment expenses in Box 5 if applicable. This box applies only to nonpublicly offered regulated investment companies that pass through investment expenses to shareholders. Recipients report these expenses on Schedule A (Form 1040), line 23, as miscellaneous itemized deductions subject to the 2-percent-of-adjusted-gross-income limitation, meaning only amounts exceeding 2 percent of adjusted gross income are deductible.
Box 6 and Box 7: Foreign Tax Information
Identify foreign taxes paid in Box 6 and the applicable foreign country or U.S. possession in Box 7. Recipients may claim these foreign taxes as either a deduction on Schedule A or as a credit on Form 1116, depending on which method provides the greater tax benefit. The foreign tax credit requires additional calculations and documentation to ensure proper allocation of foreign-source income.
Box 10 and Box 11: Exempt-Interest Dividends
Report exempt-interest dividends from municipal bond funds or regulated investment companies in Box 10. Separately identify the portion subject to the alternative minimum tax in Box 11; this amount is included in the Box 10 total. Recipients must report exempt-interest dividends on Form 1040 even though these amounts are not subject to regular federal income tax, as they affect certain tax calculations and credits.
State Tax Withholding Boxes
Complete state tax reporting boxes 12 through 14 with the state identification number and state income tax withheld for recipients in states requiring separate reporting. States vary in their requirements for dividend income reporting and withholding procedures. Recipients use these boxes to complete their state income tax returns and claim credit for any state taxes withheld from dividend payments.
Filing Deadlines and Transmittal Requirements
File Copy A with the IRS by February 28, 2014, or March 31, 2014, if filing electronically using Publication 1220 specifications. Furnish Copy B to the recipient by January 31, 2014.
Attach Form 1096 transmittal form when filing paper copies with the IRS. Do not print forms directly from the IRS website for submission to the IRS, as these copies do not meet scannable format requirements.
Nonresident Alien Withholding
If the recipient is a nonresident alien, withhold federal income tax and file Form 1042-S instead of Form 1099-DIV. Nonresident aliens face different withholding rates and reporting requirements for U.S.-source dividend income. Review the recipient's Form W-8BEN or other withholding documentation to determine the proper withholding rate and any applicable treaty benefits.
Nominee Reporting Requirements
Nominee reporting rules remain unchanged for 2013. If you receive a Form 1099-DIV reporting amounts belonging to another person, file a separate Form 1099-DIV with Form 1096 for each other owner.
Spouses are not required to file nominee returns for dividends received in joint accounts. Nominees must provide Copy B to the actual owner by January 31, 2014, and file Copy A with the IRS by the applicable deadline.
2013 Tax Year Updates and Compliance Notes
The following updates apply to 2013 tax year reporting:
- Qualified dividend rates include 0 percent, 15 percent, and 20 percent based on taxpayer income brackets.
- Section 1202 gain exclusion percentages vary by stock acquisition date: 50 percent for stock acquired before February 18, 2009; 75 percent for stock acquired from February 18, 2009, through September 27, 2010; and 100 percent for stock acquired after September 27, 2010.
- Collectibles gain reported in Box 2d continues at a 28 percent maximum rate with no inflation adjustments or rate modifications.
- Form 1099-DIV 2013 contains no new boxes, deleted lines, or redesigned sections compared to the prior-year form structure; all 14 reporting boxes remain in use.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
