IRS Form 1099-DIV is a document financial institutions use to report dividends and distributions to both the investor (that’s you) and the IRS. When you own dividend-paying stocks or a mutual fund that makes a capital gains distribution, you’ll probably receive IRS Form 1099-DIV in the mail. As with other tax forms, you’ll use the information it contains to complete your return.
If you’ve gotten a Form 1099-DIV and aren’t sure what to do with it, you’re in luck. This article explains what a Form 1099-DIV is and when you’ll receive one. We’ll also discuss how you should use Form 1099-DIV when you’re preparing your tax return and what to do if you don’t receive one.
Definition and Examples of Form 1099-DIV
Form 1099-DIV reports dividends and distribution income to both the IRS and the taxpayer. Its formal name is Form 1099-DIV, Dividends and Distributions. If you receive dividend payments or mutual fund distributions exceeding $10 in a tax year, you’ll typically get a Form 1099-DIV. Your financial institution must send both you and the IRS a copy of the form by a prescribed deadline in the following tax year.
For 2021 dividends and distributions, the financial institution must send Form 1099-DIV to you by Jan. 31, 2022, and to the IRS by Feb. 28, 2022.
Getting a Form 1099-DIV can sometimes catch you by surprise. That’s because you’ll receive one even if your dividends or capital gains were automatically reinvested to buy more shares.
Who Uses Form 1099-DIV?
You’ll only receive Form 1099-DIV if your distributions occurred in a taxable account. For example, you won’t receive the form for distributions from an individual retirement account (IRA), annuity, pension, or profit-sharing plan. If you’re classified as a nonresident alien for tax purposes, you’ll receive Form 1042-S, rather than Form 1099-DIV.
Anyone who receives dividend or capital gains distributions of more than $10 in a taxable account during a calendar year should be on the lookout for a 1099-DIV.
Investors will receive a separate Form 1099-DIV for each taxable account where a distribution occurred. However, if you receive Form 1099-DIV in the mail, that doesn’t automatically mean you’ll owe taxes on the distribution.
For example, some dividends are considered qualified dividends at tax time, which means they’re taxed at lower long-term capital gains tax rates. In 2021, the long-term capital gains tax rate is 0% for single taxpayers with $40,000 or less in taxable income and married couples with income of $80,000 or less who file a joint tax return. If you received more than $1,500 in ordinary (nonqualified) dividends or interest income in a year, you must include a Schedule B (Form 1040) attachment when you submit your return.
Types of Form 1099
A Form 1099 is used to report income to the IRS that doesn’t come from a traditional job. Form 1099-DIV is one of many different types of 1099s. Here are some other common versions of 1099 forms you may encounter.
Lenders send Form 1099-A to both the homeowner and the IRS when they foreclose on a property. The IRS treats the balance you owed that you’re no longer liable for as taxable income.
Creditors use Form 1099-C to report the cancelation of debt. You can expect a 1099-C from any creditor that forgives a balance of $600 or more.
Federal, state, and local governments use Form 1099-G to report certain payments made to taxpayers. It’s commonly used to report unemployment compensation and state or local income tax offsets, credits, or deductions.
Banks and financial institutions use Form 1099-INT to report interest income. You’ll receive one if you earned interest of $10 or more from a savings account, money market account, or certificate of deposit (CD).
Form 1099-MISC is used to report a variety of income sources, including salesperson incentive payments, prizes, and awards; compensation for jury duty; or taxable damages from a lawsuit. It’s also used to report rents paid, medical and attorney payments, and some types of transactions related to agriculture and fishing. Pre-2020, this was the form companies often used for reporting payments to contractors and freelancers.
Companies now use Form 1099-NEC, instead of Form 1099-MISC, to report payments to independent contractors and freelancers. You’ll typically receive the form from any company that paid you $600 or more in a year.
Form 1099-R is used to report any distribution over $10 from a retirement account or annuity. You’ll receive the form even when the distribution isn’t taxable.
This form is used to report Social Security benefits, regardless of whether they’re taxable.
Where To Get a Form 1099-DIV
Most investors receive Form 1099-DIV in the mail. However, many investment companies allow you online access to all of your tax forms, including Form 1099-DIV, so you may be able to find it by logging into your account.
What To Do If You Don’t Receive Form 1099-DIV
If you don’t receive a Form 1099-DIV in the mail and don’t see it when you log into your account, contact your brokerage company. Some companies will only send you the form if your distributions were $10 or more. For extremely low-yield investments, like money market funds, your gains may be less than $10, particularly when interest rates are low.
But even if you don’t receive a Form 1099-DIV, you’re still responsible for reporting that income to the IRS. You can still find the amount of any distributions by logging into your investment account.
How To File Form 1099-DIV
You don’t need to file Form 1099-DIV with your taxes, but you’ll need to report the information on it with your return. If your dividend or interest income is less than $1,500, you can report it directly on Form 1040. If your distributions exceed $1,500, you’ll need to report it on a Schedule B attachment.
If you’re not sure how to handle Form 1099-DIV, it’s essential to consult with a tax professional. Because the form contains your Social Security number or taxpayer-identification number, the IRS will know about this income even if you don’t report it.
- You receive a Form 1099-DIV if you have dividends or mutual fund distributions of more than $10 for a tax year.
- You don’t need to file Form 1099-DIV with your return, but you need the information it contains when you prepare your return.
- Receiving Form 1099-DIV doesn’t necessarily mean you owe taxes on a distribution.
- You won’t receive Form 1099-DIV for distributions that occurred in a tax-advantaged account, like a 401(k) or IRA.
- If your dividend payments exceed $1,500 for the year, you'll need to file a Schedule B with your tax return.