If you own stocks, mutual funds, ETFs or REITs you will probably get a Form 1099-DIV each year. It splits what you received into ordinary dividends, qualified dividends, capital gain distributions and a return of capital.
This guide explains each main box, how qualified dividends differ, how a return of capital works and where each amount goes on your return, using the IRS form instructions and Topic 404.
Dividends are distributions of earnings and profits paid by a corporation to stockholders. Mutual funds, exchange traded funds, money market funds and real estate investment trusts also pass dividends and capital gain distributions through to shareholders. You should receive a Form 1099-DIV from each payer for distributions of at least $10, and the IRS says you must still report all taxable dividend income even if you do not receive a form. Dividends from credit unions and similar institutions are actually interest; see our Form 1099-INT guide.
| Box | What it shows | Where it goes |
|---|---|---|
| 1a | Total ordinary dividends that are taxable | Ordinary dividends line of Form 1040; Schedule B if required |
| 1b | Portion of 1a that may be eligible for reduced capital gains rates (qualified dividends) | Per the Form 1040 instructions |
| 2a | Total capital gain distributions from a RIC or REIT | Schedule D; you may be able to report it on Form 1040 instead if boxes 2b, 2c, 2d and 2f are empty and capital gain distributions are your only capital gains and losses |
| 2b | Unrecaptured section 1250 gain | Schedule D worksheet |
| 2d | 28% rate gain from collectibles | Schedule D worksheet |
| 3 | Return of capital (nondividend distribution) | Reduces your basis; excess over basis is capital gain |
| 4 | Backup withholding | Counts as tax withheld |
| 5 | Section 199A dividends | Qualified business income deduction; Form 8995 or 8995-A |
| 7 | Foreign tax paid | Deduction or credit on Form 1040 |
| 12 | Exempt-interest dividends | Per the Form 1040 instructions |
Box 13 shows exempt-interest dividends subject to the alternative minimum tax and is included in box 12. See our QBI deduction guide for box 5.
All taxable dividends are ordinary income, but qualified dividends are the ordinary dividends that qualify for lower capital gain rates. The payer identifies them in box 1b. Capital gain distributions in box 2a are always long-term capital gains. For the rates see our capital gains tax brackets guide.
Box 3 shows a return of capital. To the extent of your cost or other basis in the stock, the distribution reduces your basis and is not taxable; anything above your basis is taxable to you as capital gain. A return of capital is not income when you receive it, but it makes any later sale more profitable, so track your basis. Report taxable gains on Form 8949 and Schedule D; see our Schedule D guide.
Keep the form with your records and attach it to your return only if federal tax was withheld. If the form includes amounts belonging to someone else you are a nominee and must file Forms 1099-DIV for the other owners, though a spouse does not have to file a nominee return for the other spouse. This guide follows the January 2024 edition of the form, the latest final edition posted on IRS.gov as of 26 October 2026. The IRS has also posted an early draft of a December 2027 edition (not for filing); we did not find changed box descriptions in it.
| Box on your 1099-DIV | Amount | How to treat it |
|---|---|---|
| 1a Total ordinary dividends | $1,000 | Report as ordinary dividends; $800 of it is qualified |
| 1b Qualified dividends | $800 | Eligible for reduced capital gains rates |
| 2a Capital gain distributions | $300 | Long-term capital gain |
| 3 Nondividend distributions | $200 | Return of capital: reduces your basis by $200 |
These are our illustrations of how the boxes fit together, not IRS examples.
IRS: Form 1099-DIV with instructions for recipient, IRS Topic 404: Dividends.