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Investment Income — How To Report Dividend Income: Investment Taxes (2025 IRS Guide)

This guide covers “Investment Income — How To Report Dividend Income” within investment taxes. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 550 (2025), Investment Income and Expenses, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Context for these rules

Publication

  • 519 U.S. Tax Guide for Aliens

  • 525 Taxable and Nontaxable Income

  • 537 Installment Sales

  • 541 Partnerships

  • 542 Corporations

  • 555 Community Property

  • 559 Survivors, Executors, and Administrators

  • 590-B Distributions from Individual Retirement Arrangements (IRAs)

  • 925 Passive Activity and At-Risk Rules

  • 938 Real Estate Mortgage Investment Conduits (REMICs) Reporting Information (And Other Collateralized Debt Obligations (CDOs))

  • 939 General Rule for Pensions and Annuities

  • 970 Tax Benefits for Education

  • 1212 Guide to Original Issue Discount (OID) Instruments

Form (and Instructions)

  • Schedule A (Form 1040) Itemized Deductions

  • Schedule B (Form 1040) Interest and Ordinary Dividends

  • Schedule D (Form 1040) Capital Gains and Losses

  • Schedule K-1 (Form 1041) Beneficiary's Share of Income, Deductions, Credits, etc.

  • Schedule K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc.

  • Schedule K-1 (Form 1120-S) Shareholder's Share of Income, Deductions, Credits, etc.

  • Schedule Q (Form 1066) Quarterly Notice to Residual Interest Holder of REMIC Taxable Income or Net Loss Allocation

  • SS-4 Application for Employer Identification Number

  • W-2 Wage and Tax Statement

  • W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)

  • W-9 Request for Taxpayer Identification Number and Certification

  • 1040 U.S. Individual Income Tax Return

  • 1040-SR U.S. Income Tax Return for Seniors

  • 1041 U.S. Income Tax Return for Estates and Trusts

  • 1065 U.S. Return of Partnership Income

  • 1096 Annual Summary and Transmittal of U.S. Information Returns

  • 1099-DIV Dividends and Distributions

  • 1099-INT Interest Income

  • 1099-MISC Miscellaneous Information

  • 1099-OID Original Issue Discount

  • 1099-PATR Taxable Distributions Received From Cooperatives

  • 1099-R Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

  • 1099 General Instructions General Instructions for Certain Information Returns

  • 1120 U.S. Corporation Income Tax Return

  • 2439 Notice to Shareholder of Undistributed Long-Term Capital Gains

  • 3115 Application for Change in Accounting Method

  • 6251 Alternative Minimum Tax — Individuals

  • 8582 Passive Activity Loss Limitations

  • 8615 Tax for Certain Children Who Have Unearned Income

  • 8814 Parents' Election To Report Child's Interest and Dividends

  • 8815 Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989

  • 8818 Optional Form To Record Redemption of Series EE and I U.S. Savings Bonds Issued After 1989

  • 8824 Like-Kind Exchanges

  • 8832 Entity Classification Election

  • 8912 Credit to Holders of Tax Credit Bonds

  • 8949 Sales and Other Dispositions of Capital Assets

  • 8960 Net Investment Income Tax—Individuals, Estates, and Trusts

  • 8997 Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments

See chapter 5, How To Get Tax Help, for information about getting these publications and forms.

Investment Income — How To Report Dividend Income

Report the total of your ordinary dividends on Form 1040 or 1040-SR, line 3b. Report qualified dividends on Form 1040 or 1040-SR, line 3a.

Form 1099-DIV.

If you owned stock on which you received $10 or more in dividends and other distributions, you should receive a Form 1099-DIV. Even if you do not receive a Form 1099-DIV, you must report all your dividend income.

See Form 1099-DIV and its instructions for more information on how to report dividend income.

Form 1040 or 1040-SR.

You must complete Schedule B (Form 1040), Part II, and attach it to your Form 1040 or 1040-SR, if:

  • Your ordinary dividends (Form 1099-DIV, box 1a) are more than $1,500, or

  • You received, as a nominee, dividends that actually belong to someone else.

See Instructions for Schedule B (Form 1040) for more information.

List on Schedule B (Form 1040), Part II, line 5, each payer's name and the ordinary dividends you received. If your securities are held by a brokerage firm (in “street name”), list the name of the brokerage firm shown on Form 1099-DIV as the payer. If your stock is held by a nominee who is the owner of record, and the nominee credited or paid you dividends on the stock, show the name of the nominee and the dividends you received or for which you were credited.

Enter on Schedule B (Form 1040), Part II, line 6 the total of the amounts listed on Schedule B (Form 1040), Part II, line 5. (However, if you hold stock as a nominee, see Nominees, later.).

Dividends received on restricted stock.

Restricted stock is stock you get from your employer for services you perform and that is nontransferable and subject to a substantial risk of forfeiture. You do not have to include the value of the stock in your income when you receive it. However, if you get dividends on restricted stock, you must include them in your income as wages, not dividends. See Restricted Property in Pub. 525 for information on restricted stock dividends.

Your employer should include these dividends in the wages shown on your Form W-2. If you also get a Form 1099-DIV for these dividends, list them on Schedule B (Form 1040), Part II, line 5, with the other dividends you received. Enter a subtotal of all your dividend income several rows above Schedule B (Form 1040), Part II, line 6. Below the subtotal, enter “Dividends on restricted stock reported as wages on Form 1040 or 1040-SR, line 1,” and include the dividends included in your wages on Form 1040 or 1040-SR, line 1. Subtract this amount from the subtotal and enter the result on Schedule B (Form 1040), Part II, line 6.

Election.

You can choose to include the value of restricted stock in gross income as pay for services. If you made this choice, report the dividends on the stock like any other dividends. If you receive both a Form 1099-DIV and a Form W-2 showing these dividends, do not include the dividends in your wages reported on Form 1040 or 1040-SR, line 1. Attach a statement to your Form 1040 or 1040-SR explaining why the amount shown on your Form 1040 or 1040-SR, line 1 is different from the amount shown on your Form W-2.

Independent contractor.

If you received restricted stock for services as an independent contractor, the rules in the previous discussion apply. Generally, you must treat dividends you receive on the stock as income from self-employment.

Qualified dividends.

Report qualified dividends (Form 1099-DIV, box 1b) on Form 1040 or 1040-SR, line 3a. The amount in Form 1099-DIV, box 1b is already included in box 1a. Do not add the amount in box 1b to, or subtract it from, the amount in box 1a. Do not include any of the following on Form 1040 or 1040-SR, line 3a.

  • Qualified dividends you received as a nominee. See Nominees, later.

  • Dividends on stock for which you did not meet the holding period. See Holding period, earlier, under Qualified Dividends.

  • Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property.

  • Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends.

  • Payments shown on Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends.

If you have qualified dividends, you must figure your tax by completing the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 or 1040-SR instructions or the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions, whichever applies.

Investment interest deducted.

If you claim a deduction for investment interest, you may have to reduce the amount of your qualified dividends that are eligible for the 0%, 15%, or 20% tax rate. Reduce it by the qualified dividends you choose to include in investment income when figuring the limit on your investment interest deduction. This is done on the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet. For more information about the limit on investment interest, see Interest Expenses in chapter 3.

Capital gain distributions.

If you received capital gain distributions, you report them directly on Form 1040 or 1040-SR, line 7a; or on Schedule D (Form 1040), line 13, depending on your situation. If you received capital gain distributions from a mutual fund or real estate investment trust (REIT), the distributions of net realized short-term capital gains are not treated as capital gains. Instead, they are included on Form 1099-DIV as ordinary dividends. Report them on your tax return as ordinary dividends.

Exceptions to filing Form 8949 and Schedule D (Form 1040).

There are certain situations where you may not have to file Form 8949 and/or Schedule D (Form 1040). See Instructions for Form 1040, Line 7a, for those exceptions.

Undistributed capital gains.

Follow the Instructions for the Shareholder on Form 2439 to report undistributed capital gains and the tax paid by the mutual fund on those gains.

Nondividend distributions.

Report nondividend distributions (Form 1099-DIV, box 3) only after your basis in the stock has been reduced to zero. After the basis of your stock has been reduced to zero, you must show this excess amount on Form 8949, Part I, if you held the stock 1 year or less. Show it on Form 8949, Part II, if you held the stock for more than 1 year.

For more information on Form 8949 and Schedule D (Form 1040), see Reporting Capital Gains and Losses in chapter 4. Also, see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040).

Nominees.

If you received ordinary dividends as a nominee, include them on Schedule B (Form 1040), Part II, line 5. Several rows above Schedule B (Form 1040), Part II, line 6, put a subtotal of all dividend income listed on Schedule B (Form 1040), Part II, line 5. Below this subtotal, enter “Nominee Distribution” and show the amount received as a nominee. Subtract the total of your nominee distributions from the subtotal. Enter the result on Schedule B (Form 1040), Part II, line 6.

If you received a capital gain distribution or were allocated an undistributed capital gain as a nominee, report only the amount that belongs to you on Form 1040 or 1040-SR, line 7a; or Schedule D (Form 1040), line 13, whichever is appropriate. Attach a statement to your return showing the full amount you received or were allocated and the amount you received or were allocated as a nominee.

File Form 1099-DIV with the IRS.

If you received dividends as a nominee in 2025, you must file a Form 1099-DIV (or Form 2439) for those dividends with the IRS. Send the Form 1099-DIV with a Form 1096 to your Internal Revenue Service Center by March 2, 2026 (March 31, 2026, if you file Form 1099-DIV electronically). Give the actual owner of the dividends Copy B of the Form 1099-DIV by February 2, 2026. On Form 1099-DIV, you should be listed as the “Payer.” The other owner should be listed as the “Recipient.” You do not, however, have to file a Form 1099-DIV to show payments for your spouse. For more information about the reporting requirements and the penalties for failure to file (or furnish) certain information returns, see the General Instructions for Certain Information Returns and the Instructions for Form 2439.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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