When do you have to pay taxes on dividends

**You Typically Pay Taxes on Dividends in the Year They Are Received** 1. **Dividend Taxation**: Dividends are distributions of property made by a corporation to its shareholders. These distributions are generally subject to taxation as ordinary income unless they meet the criteria for qualified dividends. 2. **Ordinary Dividends**: Ordinary dividends are taxable as ordinary income in the year received. If you receive a dividend from a corporation, you will typically be required to pay taxes on it in the year you receive it. 3. **Qualified Dividends**: Qualified dividends, on the other hand, are taxed at a lower capital gains rate if you meet certain holding period requirements. To qualify for the reduced rate, you must hold the stock for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date. 4. **Tax Reporting**: You should receive a Form 1099-DIV, Dividends and Distributions from each payer for distributions of at least $10. This form will show the total ordinary dividends and qualified dividends you received during the year. In conclusion, you typically pay taxes on dividends in the year you receive them. Ordinary dividends are taxed as ordinary income, while qualified dividends are taxed at lower capital gains rates if you meet the holding period requirements.