How to Read a 1099-DIV: What Each Box Means

Form 1099-DIV reports the dividends and other distributions a brokerage, mutual fund, or bank paid you during the year, and reading it comes down to knowing what each numbered box represents and where that number goes on your return. Any payer that distributed $10 or more in dividends must send you the form by January 31 and file a copy with the IRS.¹ The boxes below walk through what each one means, in the order they appear on the form.

The Header: Payer and Recipient

The top of the form identifies the institution paying the dividends and you as the recipient. The payer side lists the institution’s name, address, phone number, and federal Taxpayer Identification Number. Your side shows your name, address, and Social Security Number or ITIN. The IRS uses these identifiers to match the form to your return through automated systems, so a mismatch between the name and TIN on the form and the ones on your 1040 will get flagged.¹

Boxes 1a and 1b: Ordinary and Qualified Dividends

Box 1a is your total ordinary dividends for the year. That includes every taxable dividend payment you received, including dividends that were automatically reinvested rather than paid in cash.¹ You put this amount on the ordinary dividends line of Form 1040, and it’s taxed at the same rates as wages, which run from 10% to 37% for tax year 2026.²

Box 1b shows the portion of your Box 1a total that qualifies for lower rates. These qualified dividends are taxed at long-term capital gains rates of 0%, 15%, or 20% depending on your taxable income.³ For a single filer in 2026, the 0% rate applies to taxable income up to $49,450, the 15% rate covers income above that up to $545,500, and the 20% rate applies above $545,500. For married couples filing jointly, the thresholds are $98,900 and $613,700.

To qualify, you generally must have held the stock more than 60 days during the 121-day window that begins 60 days before the ex-dividend date, and the dividend must come from a U.S. corporation or a qualifying foreign company. One thing to watch: Box 1b is already included in Box 1a. Don’t add them together.

Boxes 2a Through 2f: Capital Gain Distributions

Box 2a reports total capital gain distributions, which usually come from mutual funds or REITs that sold investments at a profit. These are treated as long-term capital gains on your return no matter how long you personally held the fund shares, and you report the amount on Schedule D.⁴

The remaining 2-series boxes break out categories that are already inside Box 2a. Box 2b, unrecaptured Section 1250 gain, is gain from depreciable real property such as commercial buildings held by a REIT, taxed at a maximum rate of 25%.⁵ Box 2c, Section 1202 gain, is gain from certain qualified small business stock; depending on when the stock was acquired, up to 100% may be excluded from income.¹ Box 2d, collectibles gain, is taxed at a maximum rate of 28%. Boxes 2e and 2f report Section 897 gains from the sale of U.S. real property interests by a regulated investment company or REIT, split into ordinary dividends (2e) and capital gains (2f); these are relevant primarily to foreign investors.

Most individual investors will only see an amount in Box 2a. The sub-boxes matter when they apply because each carries its own maximum rate.

Box 3: Nondividend Distributions

Box 3 is a return of your own invested capital, not a share of company profits. It isn’t taxable when you receive it. Instead, it reduces the cost basis of your investment.³ If you bought shares for $5,000 and received a $200 nondividend distribution, your adjusted basis drops to $4,800. Once basis reaches zero, any further nondividend distributions are taxed as capital gains. Keep the running total: a lower basis means a larger taxable gain when you eventually sell.

Box 4: Federal Income Tax Withheld

Box 4 shows federal income tax already withheld from your distributions. This is usually backup withholding, triggered when you haven’t given the payer a correct TIN or the IRS has notified the payer that you previously underreported interest or dividends.¹ The backup withholding rate is 24%.⁶ Whatever appears here is a credit on your return, reducing what you owe or adding to your refund.

Box 5: Section 199A Dividends

Box 5 reports qualified REIT dividends that may be eligible for the 20% qualified business income deduction under Section 199A. The amount is already inside your Box 1a total, so you don’t report it as additional income. You use it to calculate a deduction that reduces taxable income.¹ The Section 199A deduction was made permanent in 2025 and continues to apply for 2026.

Box 6: Investment Expenses

Box 6 shows your share of investment expenses allocated by a regulated investment company. Individual investors can no longer deduct these amounts; the miscellaneous itemized deduction that once covered them was suspended in 2018 and has been permanently eliminated. Most individuals will see this box blank.

Boxes 7 and 8: Foreign Tax Paid

Box 7 reports the total foreign tax withheld on your dividend income, and Box 8 identifies the country or U.S. possession where it was paid.¹ International stock funds and foreign companies typically produce an amount here. You can claim the foreign tax as a credit, which directly reduces your tax bill, or as an itemized deduction.

If your total foreign tax is $300 or less ($600 or less for married filing jointly) and all of the foreign income was passive, you can claim the credit directly on Form 1040 without filing Form 1116.⁷ Above those thresholds, or if any of the income is non-passive, you need Form 1116 to calculate the credit.

Boxes 9 and 10: Liquidation Distributions

Box 9 shows cash liquidation distributions and Box 10 shows noncash liquidation distributions from a partial or complete corporate liquidation. These aren’t ordinary dividends; they represent proceeds from a company winding down and distributing assets to shareholders. Like Box 3 amounts, liquidation payments first reduce your cost basis in the stock. Once basis hits zero, additional amounts are taxed as capital gains.¹

Box 11: FATCA Filing Requirement

Box 11 is a checkbox rather than a dollar figure. If it’s checked, the payer is reporting the account to satisfy its obligations under the Foreign Account Tax Compliance Act. That flag can mean you need to file Form 8938 with your return if your foreign financial assets exceed certain thresholds.³

Boxes 12 and 13: Tax-Exempt Dividends

Box 12 shows exempt-interest dividends from a mutual fund or regulated investment company that holds municipal bonds. These are generally free from federal income tax, though they may still be taxable in your state.¹ You still report the amount on your return; it just doesn’t increase your federal tax.

Box 13 shows the portion of Box 12 that comes from specified private activity bonds. That income is exempt from regular federal income tax but counts as a preference item for the Alternative Minimum Tax. You use Form 6251 to determine whether the AMT applies.³

Boxes 14, 15, and 16: State Tax Information

These three boxes handle state-level reporting. Box 14 shows the state’s abbreviation, Box 15 contains the payer’s state ID number, and Box 16 shows state income tax withheld from your distributions.³ The form has room for up to two states. Any state tax withheld is a credit against your state liability, working the same way as Box 4 does at the federal level.

Two Things That Aren’t a Box But Affect What You Owe

Your 1099-DIV won’t show a line for the Net Investment Income Tax, but a 3.8% NIIT applies to dividends, capital gains, and other investment income if your modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly).⁸ The tax applies to the lesser of your net investment income or the amount by which your MAGI exceeds the threshold.⁹ Those thresholds aren’t adjusted for inflation. If you’re near the top bracket, the combined effective rate on qualified dividends can reach 23.8%.

The second thing that isn’t on the form: if your total ordinary dividends exceed $1,500, you have to file Schedule B with your Form 1040, listing each payer and amount.¹⁰ Gather every 1099-DIV before starting the schedule.

If Your 1099-DIV Is Wrong

If any amount looks off, contact the institution that issued the form and ask for a corrected version. File your return by the deadline even if the correction hasn’t arrived; use the best information you have and estimate if you must. If a corrected form arrives after you’ve filed and the numbers differ, file Form 1040-X to amend the return.¹¹ Leaving off dividend income that appears on a 1099-DIV can trigger an accuracy-related penalty of 20% of the resulting underpayment, plus interest.¹² The IRS receives its own copy of every 1099-DIV, so mismatches with your return are flagged automatically.

1
Internal Revenue Service. Instructions for Form 1099-DIV
2
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
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Internal Revenue Service. Form 1099-DIV – Dividends and Distributions
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Internal Revenue Service. Mutual Funds (Costs, Distributions, etc.) 4
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Internal Revenue Service. Topic No. 409, Capital Gains and Losses
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Internal Revenue Service. Publication 15 (2026)
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Internal Revenue Service. Instructions for Form 1116
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Office of the Law Revision Counsel. 26 U.S. Code 1411 – Imposition of Tax
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Internal Revenue Service. Topic No. 559, Net Investment Income Tax
10
Internal Revenue Service. Instructions for Schedule B (Form 1040)
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Internal Revenue Service. What to Do When a W-2 or Form 1099 Is Missing or Incorrect
12
Internal Revenue Service. Accuracy-Related Penalty