AT&T’s dividend currently sits at $0.2775 per share each quarter, or $1.11 per year, and it has stayed at that exact rate every quarter since May 2022.1AT&T Investor Relations. AT&T Inc Historical Common Dividends Payments arrive in February, May, August, and November. At a stock price around $28, that works out to a forward yield of roughly 4%, above the S&P 500 average but well short of the 7% to 8% yield the stock carried before the 2022 WarnerMedia spin-off.
The 2022 Cut, in Numbers
Before April 2022, AT&T paid $0.52 per quarter, or $2.08 annually, and had raised that payout for more than three decades. The last $0.52 payment went out in February 2022.1AT&T Investor Relations. AT&T Inc Historical Common Dividends Starting with the May 2022 distribution, the quarterly rate dropped to $0.2775, a reduction of roughly 47%. The same 100 shares that once produced $208 a year now produce $111.
Why the Cut Happened
The trigger was the spin-off of WarnerMedia. On April 8, 2022, AT&T distributed shares of a subsidiary holding WarnerMedia to its shareholders, and that subsidiary immediately merged with Discovery, Inc. to form Warner Bros. Discovery (WBD).2AT&T Investor Relations. AT&T Inc / WBD Cost Basis Guide Losing WarnerMedia meant losing a big share of revenue and cash flow. Rather than stretch to keep the old payout, management sized the new dividend to leave room for paying down debt from earlier media acquisitions and for building out 5G and fiber. The remaining AT&T became a pure telecom, and the dividend was rebuilt around that narrower business.
What Shareholders Received, and the Basis Problem
Every AT&T shareholder on record as of April 5, 2022, received 0.241917 shares of WBD for each AT&T share held.2AT&T Investor Relations. AT&T Inc / WBD Cost Basis Guide A holder of 100 AT&T shares kept those 100 shares and received about 24 shares of WBD, with fractional entitlements sold on the open market and paid out in cash.
One detail matters for income planning: WBD has never paid a dividend. The spin-off shares generate no cash. If you were counting on WBD to soften the AT&T reduction, it didn’t.
How to Split Your Cost Basis
The distribution qualified as tax-free under Section 355 of the Internal Revenue Code, so simply receiving the WBD shares triggered no tax.3Office of the Law Revision Counsel. 26 USC 355 – Distribution of Stock and Securities of a Controlled Corporation The tax comes when you sell, and that requires splitting your original AT&T cost basis between the two positions.
AT&T published the allocation on IRS Form 8937, based on the relative market values of the two stocks on April 11, 2022, using an average of opening and closing prices ($19.26 for AT&T and $24.43 for WBD):2AT&T Investor Relations. AT&T Inc / WBD Cost Basis Guide
- 76.52% of your original AT&T basis stays with the AT&T shares.
- 23.48% shifts to the WBD shares you received.
Say you bought AT&T at $30 per share. Your new AT&T basis is $22.96 ($30 × 0.7652). The remaining $7.04 becomes the total basis for the 0.241917 WBD shares tied to that one AT&T share, which works out to about $29.10 per WBD share. Sell WBD at $27 and you have a capital loss of about $2.10 per share. The same math applies to any cash-in-lieu payment you received for fractional shares back in 2022, which was itself a taxable event.
Check your brokerage records. If your account still shows the full original basis on AT&T, or a zero basis on WBD, your gain or loss on a sale will be reported wrong. AT&T’s cost basis worksheet stays available on the investor relations site.
How the Current Dividend Is Taxed
AT&T’s quarterly dividends generally qualify as qualified dividends, taxed at long-term capital gains rates rather than ordinary income rates.4Internal Revenue Service. Topic No 404 – Dividends and Other Corporate Distributions For 2026, single filers pay 0% up to $49,450 of taxable income, 15% from there to $545,500, and 20% above that, with brackets roughly doubled for joint filers.5Tax Foundation. 2026 Tax Brackets and Federal Income Tax Rates
Your broker reports the numbers each January on Form 1099-DIV. Box 1a shows total ordinary dividends; Box 1b shows the qualified portion eligible for the lower rate.6Internal Revenue Service. Form 1099-DIV – Dividends and Distributions If your total ordinary dividends across all holdings exceed $1,500 for the year, Schedule B goes with your return.7Internal Revenue Service. About Schedule B Form 1040 – Interest and Ordinary Dividends
Will AT&T Raise the Dividend?
Four years at the same rate is unusual for a stock that once raised its payout every year. Management has stated the priority order plainly: pay down debt first, invest in the network second, return cash to shareholders third. AT&T generated roughly $19.4 billion in free cash flow in 2025, comfortably above the roughly $8 billion the annual dividend costs. Coverage isn’t the constraint; leverage is.
And leverage is about to get heavier. In late 2025, AT&T announced a deal to buy wireless spectrum licenses from EchoStar for about $23 billion in cash, expected to close around mid-2026.8AT&T. AT&T to Acquire Spectrum Licenses From EchoStar The company expects its net-debt-to-adjusted-EBITDA ratio to rise to roughly 3x after closing, then work back down to a long-term target of 2.5x over about three years.9AT&T. AT&T CFO Pascal Desroches to Update Shareholders Until leverage reaches that target, a meaningful dividend increase looks unlikely. Anyone buying today should plan around the current $1.11 annual payout for at least the next couple of years.
How the Payout Compares to Verizon and T-Mobile
Even after the cut, AT&T remains a significant dividend payer for the sector. Verizon pays $2.76 per share annually with a yield around 5.3%, the higher-income choice for pure yield seekers, though it carries its own heavy debt load. T-Mobile, historically not a dividend stock, started paying in late 2023 and now pays $1.02 per quarter ($4.08 annualized), with a lower yield because its share price is much higher, and more room for future increases given its newer, smaller payout. AT&T sits in the middle: moderate yield, a frozen rate, and a large spectrum acquisition ahead that will shape whether the dividend eventually resumes growing or stays flat longer than expected.