What are qualified dividends?
Qualified dividends are dividends that are eligible to be taxed at a lower tax rate. Enter the full amount of your dividends in Box 1a as Ordinary Dividends. Then enter the amount of qualified dividends in Box 1b. Qualified dividends are only a designation for determining how to tax the amount of ordinary dividends in Box 1a.
For example, if you enter $1,000 in Box 1a as ordinary dividends, and you enter $600 in Box 1b as qualified dividends, you're reporting $1000 of income on your tax return. However, the $600 of qualified dividends are taxed at a lower rate, while the $400 of ordinary dividends are taxed at your regular rate.
For example, if you enter $1,000 in Box 1a as ordinary dividends, and you enter $600 in Box 1b as qualified dividends, you're reporting $1000 of income on your tax return. However, the $600 of qualified dividends are taxed at a lower rate, while the $400 of ordinary dividends are taxed at your regular rate.
