US qualified dividends: 2026 tax rates and brackets

What makes a dividend qualified?

A qualified dividend is a dividend that meets the IRS’s requirements to be taxed at the lower capital gains rates rather than at ordinary income rates. One key requirement is the holding period: for common shares, you must generally hold the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. The holding period page works through a calendar example.

Your Form 1099-DIV reports qualified dividends separately from total ordinary dividends, so you don’t have to sort them yourself. Dividends that don’t qualify are non-qualified (or ordinary) dividends and are taxed at your regular income tax rates.

Qualified status is decided dividend by dividend. The same shares can pay a qualified dividend one quarter and a non-qualified one the next, for example if you bought them shortly before an ex-dividend date and sold soon after.

2026 qualified dividend rate breakpoints

Publication 550 says qualified dividends are taxed at the same 0%, 15% or 20% maximum rates that apply to net capital gain. The breakpoints are based on taxable income and are adjusted for inflation each year. For tax years beginning in 2026, Revenue Procedure 2025-32 sets them as follows.

Later tax years will have their own figures, published by the IRS, so check the year before using a breakpoint.

How does stacking work?

Qualified dividends don’t get their own separate bracket. They are placed on top of your other taxable income (wages, interest, non-qualified dividends and so on). The part of your qualified dividends that falls below the 0% breakpoint is taxed at 0%; the part between the breakpoints is taxed at 15%; anything above the top breakpoint is taxed at 20%.

That means a single dividend payment can be taxed at two rates. It also means your other income decides how much room is left in the 0% band. Taxable income is income after deductions, so these thresholds are higher than they’d look if you compared them with gross income.

One consequence is easy to miss. More other income can move qualified dividends from the 0% band into the 15% band even though the dividends themselves haven’t changed. In the single-filer example below, each extra dollar of other taxable income would push one more dollar of dividends out of the 0% band, until that band is used up.

Worked example: a single filer straddling two rates

A hypothetical single filer has $40,000 of other taxable income in 2026 and receives $20,000 of qualified dividends. The dividends stack on top, so they fill taxable income from $40,000 up to $60,000. Here is what our tax engine shows.

Same dividends, different filing status

Filing status changes where the 0% band ends, so the same income can produce very different results. Here is the same hypothetical situation, $40,000 of other taxable income plus $20,000 of qualified dividends in 2026, under each status, from our tax engine.

Qualified vs non-qualified at a glance

• Qualified dividends: taxed at 0%, 15% or 20%, the rates for net capital gain, based on where they land in taxable income.
• Non-qualified (ordinary) dividends: taxed at your regular income tax rates, like wages or interest.
• What decides the label: requirements set by the IRS, including the holding period around the ex-dividend date. Form 1099-DIV shows the split.
• What doesn’t change it: reinvesting the dividend. A reinvested dividend is still a taxable dividend, qualified or not.

What else can affect the tax on dividends?

• The 3.8% net investment income tax. It can apply when modified adjusted gross income is above $200,000 (single) or $250,000 (married filing jointly). See net investment income tax.
• Reinvested dividends. Dividends used to buy more shares are still taxable dividends. See DRIPs and cost basis.
• State and local tax. These may apply as well. Our estimates cover federal tax only.