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Qualified dividends receive preferential tax treatment in the US, taxed at long-term capital gains rates (0%, 15%, or 20%) instead of ordinary income rates.
To qualify, dividends must be paid by a US corporation (or qualified foreign corporation) on shares held for more than 60 days during the 121-day period around the ex-dividend date.
Most major US stock dividends are qualified. REITs and MLP distributions typically are not.
Understanding qualified dividend helps you make better investment decisions and plan for taxes. Use our dividend calculator to see how it applies to your situation.
