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Amend My 2012 Tax Return

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Amend My 2012 Tax Return

Amend my 2012 tax return Publication 530 - Additional Material Prev  Up  Next   Home   More Online Publications

Topic 602 - Child and Dependent Care Credit

You may be able to claim the child and dependent care credit if you paid work-related expenses for the care of a qualifying individual. The credit is generally a percentage of the amount of work-related expenses you paid to a care provider for the care of a qualifying individual. The percentage depends on your adjusted gross income. Work-related expenses qualifying for the credit are those paid for the care of a qualifying individual to enable you to work or actively look for work.

Expenses are paid for the care of a qualifying individual if the primary function is to assure the individual's well-being and protection. In general, amounts paid for services outside your household qualify for the credit if the care is provided for (i) a qualifying individual who is your qualifying child under age 13 or (ii) a qualifying individual who regularly spends at least 8 hours each day in your household.

The total expenses that may be used to calculate the credit are capped at $3,000 (for one qualifying individual) or at $6,000 (for two or more qualifying individuals). The dollar limits may differ depending on the tax year in question. The expenses qualifying for the computation of the credit must be reduced by the amount of any dependent care benefits provided by your employer that you exclude from gross income. In general, you can exclude up to $5,000 for dependent care benefits received from your employer. Also, generally, the expenses claimed may not exceed the lesser of your earned income or your spouse’s earned income. A special rule applies if your spouse is a full-time student or incapable of self-care. For additional information, refer to Publication 503, Child and Dependent Care Expenses.

For purposes of the child and dependent care credit, a qualifying individual is:

  1. Your dependent qualifying child who is under age 13 when the care is provided,
  2. Your spouse who is physically or mentally incapable of self-care and who has the same principal place of abode as you for more than half of the year, or
  3. Your dependent who is physically or mentally incapable of self-care, and who has the same principal place of abode as you for more than half of the year. For this purpose, whether an individual is your dependent is determined without regard to the individual's gross income, whether the individual files a joint return, or whether you are a dependent of another taxpayer.

An individual is physically or mentally incapable of self-care if, as a result of a physical or mental defect, the individual is incapable of caring for his or her hygiene or nutritional needs, or requires the full-time attention of another person for the individual's own safety or the safety of others.

For more information on who is a dependent or a qualifying child, refer to Publication 501, Exemptions, Standard Deduction, and Filing Information.

A noncustodial parent may not treat a child as a qualifying individual for purposes of the credit, even if the noncustodial parent may claim an exemption for the child. For more information on divorced or separated parents or parents who live apart at all times during the last six months of the year, refer to the topic Child of Divorced or Separated Parents or Parents Living Apart in Publication 503, Child and Dependent Care Expenses.

If a person is a qualifying individual for only a part of the tax year, only those expenses paid during that part of the year are included in calculating the credit.

In addition to paying for the care of a qualifying individual, you must meet all of the following conditions to claim the credit:

  1. Your payment must be made to a care provider who is not your spouse, the parent of your child who is your qualifying individual, your child under age 19, or a dependent of you or your spouse.
  2. You must file a joint return if you are married.
  3. You must provide the taxpayer identification number (usually the social security number) of each qualifying individual on the return on which you claim the credit.
  4. You must report the name, address, and taxpayer identification number (either the social security number, or the employer identification number) of the care provider on your return. If the care provider is a tax-exempt organization, you need only report the name and address on your return. You can use Form W-10 (PDF), Dependent Care Provider's Identification and Certification, to request this information from the care provider. If you do not provide information regarding the care provider, you may still be eligible for the credit if you can show that you exercised due diligence in attempting to provide the required information.

If you qualify for the credit, complete Form 2441 (PDF) and Form 1040 (PDF) or Form 1040A (PDF). If you received dependent care benefits from your employer (this amount should be shown on your Form W-2 (PDF), you must complete Part III of Form 2441. You cannot claim the child and dependent care credit if you use Form 1040EZ (PDF).

If you pay a provider to care for your dependent or spouse in your home, you may be a household employer. If you are a household employer, you may have to withhold and pay social security and Medicare taxes and pay federal unemployment tax. For more information, refer to Publication 926, Household Employer's Tax Guide, or Topic 756.

Page Last Reviewed or Updated: December 12, 2013

The Amend My 2012 Tax Return

Amend my 2012 tax return 8. Amend my 2012 tax return   Dividends and Other Distributions Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. Amend my 2012 tax return Reporting tax withheld. Amend my 2012 tax return Nominees. Amend my 2012 tax return Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. Amend my 2012 tax return Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. Amend my 2012 tax return Alternative minimum tax treatment. Amend my 2012 tax return How To Report Dividend IncomeInvestment interest deducted. Amend my 2012 tax return Reminder Foreign-source income. Amend my 2012 tax return  If you are a U. Amend my 2012 tax return S. Amend my 2012 tax return citizen with dividend income from sources outside the United States (foreign-source income), you must report that income on your tax return unless it is exempt by U. Amend my 2012 tax return S. Amend my 2012 tax return law. Amend my 2012 tax return This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. Amend my 2012 tax return Introduction This chapter discusses the tax treatment of: Ordinary dividends, Capital gain distributions, Nondividend distributions, and Other distributions you may receive from a corporation or a mutual fund. Amend my 2012 tax return This chapter also explains how to report dividend income on your tax return. Amend my 2012 tax return Dividends are distributions of money, stock, or other property paid to you by a corporation or by a mutual fund. Amend my 2012 tax return You also may receive dividends through a partnership, an estate, a trust, or an association that is taxed as a corporation. Amend my 2012 tax return However, some amounts you receive that are called dividends are actually interest income. Amend my 2012 tax return (See Dividends that are actually interest under Taxable Interest in chapter 7. Amend my 2012 tax return ) Most distributions are paid in cash (or check). Amend my 2012 tax return However, distributions can consist of more stock, stock rights, other property, or services. Amend my 2012 tax return Useful Items - You may want to see: Publication 514 Foreign Tax Credit for Individuals 550 Investment Income and Expenses Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends General Information This section discusses general rules for dividend income. Amend my 2012 tax return Tax on unearned income of certain children. Amend my 2012 tax return   Part of a child's 2013 unearned income may be taxed at the parent's tax rate. Amend my 2012 tax return If it is, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. Amend my 2012 tax return If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. Amend my 2012 tax return    Some parents can choose to include the child's interest and dividends on the parent's return if certain requirements are met. Amend my 2012 tax return Use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. Amend my 2012 tax return   For more information about the tax on unearned income of children and the parents' election, see chapter 31. Amend my 2012 tax return Beneficiary of an estate or trust. Amend my 2012 tax return    Dividends and other distributions you receive as a beneficiary of an estate or trust are generally taxable income. Amend my 2012 tax return You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. Amend my 2012 tax return , from the fiduciary. Amend my 2012 tax return Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. Amend my 2012 tax return Social security number (SSN) or individual taxpayer identification number (ITIN). Amend my 2012 tax return    You must give your SSN or ITIN to any person required by federal tax law to make a return, statement, or other document that relates to you. Amend my 2012 tax return This includes payers of dividends. Amend my 2012 tax return If you do not give your SSN or ITIN to the payer of dividends, you may have to pay a penalty. Amend my 2012 tax return For more information on SSNs and ITINs, see Social Security Number (SSN) in chapter 1. Amend my 2012 tax return Backup withholding. Amend my 2012 tax return   Your dividend income is generally not subject to regular withholding. Amend my 2012 tax return However, it may be subject to backup withholding to ensure that income tax is collected on the income. Amend my 2012 tax return Under backup withholding, the payer of dividends must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. Amend my 2012 tax return   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. Amend my 2012 tax return For more information, see Backup Withholding in chapter 4. Amend my 2012 tax return Stock certificate in two or more names. Amend my 2012 tax return   If two or more persons hold stock as joint tenants, tenants by the entirety, or tenants in common, each person's share of any dividends from the stock is determined by local law. Amend my 2012 tax return Form 1099-DIV. Amend my 2012 tax return   Most corporations and mutual funds use Form 1099-DIV, Dividends and Distributions, to show you the distributions you received from them during the year. Amend my 2012 tax return Keep this form with your records. Amend my 2012 tax return You do not have to attach it to your tax return. Amend my 2012 tax return Dividends not reported on Form 1099-DIV. Amend my 2012 tax return   Even if you do not receive Form 1099-DIV, you must still report all your taxable dividend income. Amend my 2012 tax return For example, you may receive distributive shares of dividends from partnerships or S corporations. Amend my 2012 tax return These dividends are reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Amend my 2012 tax return , and Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. Amend my 2012 tax return Reporting tax withheld. Amend my 2012 tax return   If tax is withheld from your dividend income, the payer must give you a Form 1099-DIV that indicates the amount withheld. Amend my 2012 tax return Nominees. Amend my 2012 tax return   If someone receives distributions as a nominee for you, that person should give you a Form 1099-DIV, which will show distributions received on your behalf. Amend my 2012 tax return Form 1099-MISC. Amend my 2012 tax return   Certain substitute payments in lieu of dividends or tax-exempt interest received by a broker on your behalf must be reported to you on Form 1099-MISC, Miscellaneous Income, or a similar statement. Amend my 2012 tax return See Reporting Substitute Payments under Short Sales in chapter 4 of Publication 550 for more information about reporting these payments. Amend my 2012 tax return Incorrect amount shown on a Form 1099. Amend my 2012 tax return   If you receive a Form 1099 that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. Amend my 2012 tax return The new Form 1099 you receive will be marked “Corrected. Amend my 2012 tax return ” Dividends on stock sold. Amend my 2012 tax return   If stock is sold, exchanged, or otherwise disposed of after a dividend is declared but before it is paid, the owner of record (usually the payee shown on the dividend check) must include the dividend in income. Amend my 2012 tax return Dividends received in January. Amend my 2012 tax return   If a mutual fund (or other regulated investment company) or real estate investment trust (REIT) declares a dividend (including any exempt-interest dividend or capital gain distribution) in October, November, or December, payable to shareholders of record on a date in one of those months but actually pays the dividend during January of the next calendar year, you are considered to have received the dividend on December 31. Amend my 2012 tax return You report the dividend in the year it was declared. Amend my 2012 tax return Ordinary Dividends Ordinary (taxable) dividends are the most common type of distribution from a corporation or a mutual fund. Amend my 2012 tax return They are paid out of earnings and profits and are ordinary income to you. Amend my 2012 tax return This means they are not capital gains. Amend my 2012 tax return You can assume that any dividend you receive on common or preferred stock is an ordinary dividend unless the paying corporation or mutual fund tells you otherwise. Amend my 2012 tax return Ordinary dividends will be shown in box 1a of the Form 1099-DIV you receive. Amend my 2012 tax return Qualified Dividends Qualified dividends are the ordinary dividends subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain. Amend my 2012 tax return They should be shown in box 1b of the Form 1099-DIV you receive. Amend my 2012 tax return The maximum rate of tax on qualified dividends is: 0% on any amount that otherwise would be taxed at a 10% or 15% rate. Amend my 2012 tax return 15% on any amount that otherwise would be taxed at rates greater than 15% but less than 39. Amend my 2012 tax return 6%. Amend my 2012 tax return 20% on any amount that otherwise would be taxed at a 39. Amend my 2012 tax return 6% rate. Amend my 2012 tax return To qualify for the maximum rate, all of the following requirements must be met. Amend my 2012 tax return The dividends must have been paid by a U. Amend my 2012 tax return S. Amend my 2012 tax return corporation or a qualified foreign corporation. Amend my 2012 tax return (See Qualified foreign corporation , later. Amend my 2012 tax return ) The dividends are not of the type listed later under Dividends that are not qualified dividends . Amend my 2012 tax return You meet the holding period (discussed next). Amend my 2012 tax return Holding period. Amend my 2012 tax return   You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. Amend my 2012 tax return The ex-dividend date is the first date following the declaration of a dividend on which the buyer of a stock is not entitled to receive the next dividend payment. Amend my 2012 tax return Instead, the seller will get the dividend. Amend my 2012 tax return   When counting the number of days you held the stock, include the day you disposed of the stock, but not the day you acquired it. Amend my 2012 tax return See the examples later. Amend my 2012 tax return Exception for preferred stock. Amend my 2012 tax return   In the case of preferred stock, you must have held the stock more than 90 days during the 181-day period that begins 90 days before the ex-dividend date if the dividends are due to periods totaling more than 366 days. Amend my 2012 tax return If the preferred dividends are due to periods totaling less than 367 days, the holding period in the previous paragraph applies. Amend my 2012 tax return Example 1. Amend my 2012 tax return You bought 5,000 shares of XYZ Corp. Amend my 2012 tax return common stock on July 9, 2013. Amend my 2012 tax return XYZ Corp. Amend my 2012 tax return paid a cash dividend of 10 cents per share. Amend my 2012 tax return The ex-dividend date was July 16, 2013. Amend my 2012 tax return Your Form 1099-DIV from XYZ Corp. Amend my 2012 tax return shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). Amend my 2012 tax return However, you sold the 5,000 shares on August 12, 2013. Amend my 2012 tax return You held your shares of XYZ Corp. Amend my 2012 tax return for only 34 days of the 121-day period (from July 10, 2013, through August 12, 2013). Amend my 2012 tax return The 121-day period began on May 17, 2013 (60 days before the ex-dividend date), and ended on September 14, 2013. Amend my 2012 tax return You have no qualified dividends from XYZ Corp. Amend my 2012 tax return because you held the XYZ stock for less than 61 days. Amend my 2012 tax return Example 2. Amend my 2012 tax return Assume the same facts as in Example 1 except that you bought the stock on July 15, 2013 (the day before the ex-dividend date), and you sold the stock on September 16, 2013. Amend my 2012 tax return You held the stock for 63 days (from July 16, 2013, through September 16, 2013). Amend my 2012 tax return The $500 of qualified dividends shown in box 1b of your Form 1099-DIV are all qualified dividends because you held the stock for 61 days of the 121-day period (from July 16, 2013, through September 14, 2013). Amend my 2012 tax return Example 3. Amend my 2012 tax return You bought 10,000 shares of ABC Mutual Fund common stock on July 9, 2013. Amend my 2012 tax return ABC Mutual Fund paid a cash dividend of 10 cents a share. Amend my 2012 tax return The ex-dividend date was July 16, 2013. Amend my 2012 tax return The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. Amend my 2012 tax return Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. Amend my 2012 tax return However, you sold the 10,000 shares on August 12, 2013. Amend my 2012 tax return You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days. Amend my 2012 tax return Holding period reduced where risk of loss is diminished. Amend my 2012 tax return   When determining whether you met the minimum holding period discussed earlier, you cannot count any day during which you meet any of the following conditions. Amend my 2012 tax return You had an option to sell, were under a contractual obligation to sell, or had made (and not closed) a short sale of substantially identical stock or securities. Amend my 2012 tax return You were grantor (writer) of an option to buy substantially identical stock or securities. Amend my 2012 tax return Your risk of loss is diminished by holding one or more other positions in substantially similar or related property. Amend my 2012 tax return   For information about how to apply condition (3), see Regulations section 1. Amend my 2012 tax return 246-5. Amend my 2012 tax return Qualified foreign corporation. Amend my 2012 tax return   A foreign corporation is a qualified foreign corporation if it meets any of the following conditions. Amend my 2012 tax return The corporation is incorporated in a U. Amend my 2012 tax return S. Amend my 2012 tax return possession. Amend my 2012 tax return The corporation is eligible for the benefits of a comprehensive income tax treaty with the United States that the Treasury Department determines is satisfactory for this purpose and that includes an exchange of information program. Amend my 2012 tax return For a list of those treaties, see Table 8-1. Amend my 2012 tax return The corporation does not meet (1) or (2) above, but the stock for which the dividend is paid is readily tradable on an established securities market in the United States. Amend my 2012 tax return See Readily tradable stock , later. Amend my 2012 tax return Exception. Amend my 2012 tax return   A corporation is not a qualified foreign corporation if it is a passive foreign investment company during its tax year in which the dividends are paid or during its previous tax year. Amend my 2012 tax return Readily tradable stock. Amend my 2012 tax return   Any stock (such as common, ordinary, or preferred) or an American depositary receipt in respect of that stock is considered to satisfy requirement (3) under Qualified foreign corporation , if it is listed on a national securities exchange that is registered under section 6 of the Securities Exchange Act of 1934 or on the Nasdaq Stock Market. Amend my 2012 tax return For a list of the exchanges that meet these requirements, see www. Amend my 2012 tax return sec. Amend my 2012 tax return gov/divisions/marketreg/mrexchanges. Amend my 2012 tax return shtml. Amend my 2012 tax return Dividends that are not qualified dividends. Amend my 2012 tax return   The following dividends are not qualified dividends. Amend my 2012 tax return They are not qualified dividends even if they are shown in box 1b of Form 1099-DIV. Amend my 2012 tax return Capital gain distributions. Amend my 2012 tax return Dividends paid on deposits with mutual savings banks, cooperative banks, credit unions, U. Amend my 2012 tax return S. Amend my 2012 tax return building and loan associations, U. Amend my 2012 tax return S. Amend my 2012 tax return savings and loan associations, federal savings and loan associations, and similar financial institutions. Amend my 2012 tax return (Report these amounts as interest income. Amend my 2012 tax return ) Dividends from a corporation that is a tax-exempt organization or farmer's cooperative during the corporation's tax year in which the dividends were paid or during the corporation's previous tax year. Amend my 2012 tax return Dividends paid by a corporation on employer securities held on the date of record by an employee stock ownership plan (ESOP) maintained by that corporation. Amend my 2012 tax return Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Amend my 2012 tax return Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Amend my 2012 tax return Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Amend my 2012 tax return Table 8-1. Amend my 2012 tax return Income Tax Treaties Income tax treaties the United States has with the following countries satisfy requirement (2) under Qualified foreign corporation. Amend my 2012 tax return Australia Indonesia Romania Austria Ireland Russian Bangladesh Israel Federation Barbados Italy Slovak Belgium Jamaica Republic Bulgaria Japan Slovenia Canada Kazakhstan South Africa China Korea Spain Cyprus Latvia Sri Lanka Czech Lithuania Sweden Republic Luxembourg Switzerland Denmark Malta Thailand Egypt Mexico Trinidad and Estonia Morocco Tobago Finland Netherlands Tunisia France New Zealand Turkey Germany Norway Ukraine Greece Pakistan United Hungary Philippines Kingdom Iceland Poland Venezuela India Portugal     Dividends Used to Buy More Stock The corporation in which you own stock may have a dividend reinvestment plan. Amend my 2012 tax return This plan lets you choose to use your dividends to buy (through an agent) more shares of stock in the corporation instead of receiving the dividends in cash. Amend my 2012 tax return Most mutual funds also permit shareholders to automatically reinvest distributions in more shares in the fund, instead of receiving cash. Amend my 2012 tax return If you use your dividends to buy more stock at a price equal to its fair market value, you still must report the dividends as income. Amend my 2012 tax return If you are a member of a dividend reinvestment plan that lets you buy more stock at a price less than its fair market value, you must report as dividend income the fair market value of the additional stock on the dividend payment date. Amend my 2012 tax return You also must report as dividend income any service charge subtracted from your cash dividends before the dividends are used to buy the additional stock. Amend my 2012 tax return But you may be able to deduct the service charge. Amend my 2012 tax return See chapter 28 for more information about deducting expenses of producing income. Amend my 2012 tax return In some dividend reinvestment plans, you can invest more cash to buy shares of stock at a price less than fair market value. Amend my 2012 tax return If you choose to do this, you must report as dividend income the difference between the cash you invest and the fair market value of the stock you buy. Amend my 2012 tax return When figuring this amount, use the fair market value of the stock on the dividend payment date. Amend my 2012 tax return Money Market Funds Report amounts you receive from money market funds as dividend income. Amend my 2012 tax return Money market funds are a type of mutual fund and should not be confused with bank money market accounts that pay interest. Amend my 2012 tax return Capital Gain Distributions Capital gain distributions (also called capital gain dividends) are paid to you or credited to your account by mutual funds (or other regulated investment companies) and real estate investment trusts (REITs). Amend my 2012 tax return They will be shown in box 2a of the Form 1099-DIV you receive from the mutual fund or REIT. Amend my 2012 tax return Report capital gain distributions as long-term capital gains, regardless of how long you owned your shares in the mutual fund or REIT. Amend my 2012 tax return Undistributed capital gains of mutual funds and REITs. Amend my 2012 tax return    Some mutual funds and REITs keep their long-term capital gains and pay tax on them. Amend my 2012 tax return You must treat your share of these gains as distributions, even though you did not actually receive them. Amend my 2012 tax return However, they are not included on Form 1099-DIV. Amend my 2012 tax return Instead, they are reported to you in box 1a of Form 2439. Amend my 2012 tax return   Report undistributed capital gains (box 1a of Form 2439) as long-term capital gains on Schedule D (Form 1040), column (h), line 11. Amend my 2012 tax return   The tax paid on these gains by the mutual fund or REIT is shown in box 2 of Form 2439. Amend my 2012 tax return You take credit for this tax by including it on Form 1040, line 71, and checking box a on that line. Amend my 2012 tax return Attach Copy B of Form 2439 to your return, and keep Copy C for your records. Amend my 2012 tax return Basis adjustment. Amend my 2012 tax return   Increase your basis in your mutual fund, or your interest in a REIT, by the difference between the gain you report and the credit you claim for the tax paid. Amend my 2012 tax return Additional information. Amend my 2012 tax return   For more information on the treatment of distributions from mutual funds, see Publication 550. Amend my 2012 tax return Nondividend Distributions A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corporation or a mutual fund. Amend my 2012 tax return You should receive a Form 1099-DIV or other statement showing the nondividend distribution. Amend my 2012 tax return On Form 1099-DIV, a nondividend distribution will be shown in box 3. Amend my 2012 tax return If you do not receive such a statement, you report the distribution as an ordinary dividend. Amend my 2012 tax return Basis adjustment. Amend my 2012 tax return   A nondividend distribution reduces the basis of your stock. Amend my 2012 tax return It is not taxed until your basis in the stock is fully recovered. Amend my 2012 tax return This nontaxable portion is also called a return of capital; it is a return of your investment in the stock of the company. Amend my 2012 tax return If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first. Amend my 2012 tax return   When the basis of your stock has been reduced to zero, report any additional nondividend distribution you receive as a capital gain. Amend my 2012 tax return Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock. Amend my 2012 tax return See Holding Period in chapter 14. Amend my 2012 tax return Example. Amend my 2012 tax return You bought stock in 2000 for $100. Amend my 2012 tax return In 2003, you received a nondividend distribution of $80. Amend my 2012 tax return You did not include this amount in your income, but you reduced the basis of your stock to $20. Amend my 2012 tax return You received a nondividend distribution of $30 in 2013. Amend my 2012 tax return The first $20 of this amount reduced your basis to zero. Amend my 2012 tax return You report the other $10 as a long-term capital gain for 2013. Amend my 2012 tax return You must report as a long-term capital gain any nondividend distribution you receive on this stock in later years. Amend my 2012 tax return Liquidating Distributions Liquidating distributions, sometimes called liquidating dividends, are distributions you receive during a partial or complete liquidation of a corporation. Amend my 2012 tax return These distributions are, at least in part, one form of a return of capital. Amend my 2012 tax return They may be paid in one or more installments. Amend my 2012 tax return You will receive Form 1099-DIV from the corporation showing you the amount of the liquidating distribution in box 8 or 9. Amend my 2012 tax return For more information on liquidating distributions, see chapter 1 of Publication 550. Amend my 2012 tax return Distributions of Stock and Stock Rights Distributions by a corporation of its own stock are commonly known as stock dividends. Amend my 2012 tax return Stock rights (also known as “stock options”) are distributions by a corporation of rights to acquire the corporation's stock. Amend my 2012 tax return Generally, stock dividends and stock rights are not taxable to you, and you do not report them on your return. Amend my 2012 tax return Taxable stock dividends and stock rights. Amend my 2012 tax return   Distributions of stock dividends and stock rights are taxable to you if any of the following apply. Amend my 2012 tax return You or any other shareholder have the choice to receive cash or other property instead of stock or stock rights. Amend my 2012 tax return The distribution gives cash or other property to some shareholders and an increase in the percentage interest in the corporation's assets or earnings and profits to other shareholders. Amend my 2012 tax return The distribution is in convertible preferred stock and has the same result as in (2). Amend my 2012 tax return The distribution gives preferred stock to some common stock shareholders and common stock to other common stock shareholders. Amend my 2012 tax return The distribution is on preferred stock. Amend my 2012 tax return (The distribution, however, is not taxable if it is an increase in the conversion ratio of convertible preferred stock made solely to take into account a stock dividend, stock split, or similar event that would otherwise result in reducing the conversion right. Amend my 2012 tax return )   The term “stock” includes rights to acquire stock, and the term “shareholder” includes a holder of rights or of convertible securities. Amend my 2012 tax return If you receive taxable stock dividends or stock rights, include their fair market value at the time of distribution in your income. Amend my 2012 tax return Preferred stock redeemable at a premium. Amend my 2012 tax return   If you hold preferred stock having a redemption price higher than its issue price, the difference (the redemption premium) generally is taxable as a constructive distribution of additional stock on the preferred stock. Amend my 2012 tax return For more information, see chapter 1 of Publication 550. Amend my 2012 tax return Basis. Amend my 2012 tax return   Your basis in stock or stock rights received in a taxable distribution is their fair market value when distributed. Amend my 2012 tax return If you receive stock or stock rights that are not taxable to you, see Stocks and Bonds under Basis of Investment Property in chapter 4 of Publication 550 for information on how to figure their basis. Amend my 2012 tax return Fractional shares. Amend my 2012 tax return    You may not own enough stock in a corporation to receive a full share of stock if the corporation declares a stock dividend. Amend my 2012 tax return However, with the approval of the shareholders, the corporation may set up a plan in which fractional shares are not issued but instead are sold, and the cash proceeds are given to the shareholders. Amend my 2012 tax return Any cash you receive for fractional shares under such a plan is treated as an amount realized on the sale of the fractional shares. Amend my 2012 tax return Report this transaction on Form 8949, Sales and Other Dispositions of Capital Assets. Amend my 2012 tax return Enter your gain or loss, the difference between the cash you receive and the basis of the fractional shares sold, in column (h) of Schedule D (Form 1040) in Part I or Part II, whichever is appropriate. Amend my 2012 tax return    Report these transactions on Form 8949 with the correct box checked. Amend my 2012 tax return   For more information on Form 8949 and Schedule D (Form 1040), see chapter 4 of Publication 550. Amend my 2012 tax return Also see the Instructions for Form 8949 and the Instructions for Schedule D (Form 1040). Amend my 2012 tax return Example. Amend my 2012 tax return You own one share of common stock that you bought on January 3, 2004, for $100. Amend my 2012 tax return The corporation declared a common stock dividend of 5% on June 29, 2013. Amend my 2012 tax return The fair market value of the stock at the time the stock dividend was declared was $200. Amend my 2012 tax return You were paid $10 for the fractional-share stock dividend under a plan described in the discussion above. Amend my 2012 tax return You figure your gain or loss as follows: Fair market value of old stock $200. Amend my 2012 tax return 00 Fair market value of stock dividend (cash received) +10. Amend my 2012 tax return 00 Fair market value of old stock and stock dividend $210. Amend my 2012 tax return 00 Basis (cost) of old stock after the stock dividend (($200 ÷ $210) × $100) $95. Amend my 2012 tax return 24 Basis (cost) of stock dividend (($10 ÷ $210) × $100) + 4. Amend my 2012 tax return 76 Total $100. Amend my 2012 tax return 00 Cash received $10. Amend my 2012 tax return 00 Basis (cost) of stock dividend − 4. Amend my 2012 tax return 76 Gain $5. Amend my 2012 tax return 24 Because you had held the share of stock for more than 1 year at the time the stock dividend was declared, your gain on the stock dividend is a long-term capital gain. Amend my 2012 tax return Scrip dividends. Amend my 2012 tax return   A corporation that declares a stock dividend may issue you a scrip certificate that entitles you to a fractional share. Amend my 2012 tax return The certificate is generally nontaxable when you receive it. Amend my 2012 tax return If you choose to have the corporation sell the certificate for you and give you the proceeds, your gain or loss is the difference between the proceeds and the portion of your basis in the corporation's stock allocated to the certificate. Amend my 2012 tax return   However, if you receive a scrip certificate that you can choose to redeem for cash instead of stock, the certificate is taxable when you receive it. Amend my 2012 tax return You must include its fair market value in income on the date you receive it. Amend my 2012 tax return Other Distributions You may receive any of the following distributions during the year. Amend my 2012 tax return Exempt-interest dividends. Amend my 2012 tax return   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. Amend my 2012 tax return Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. Amend my 2012 tax return Information reporting requirement. Amend my 2012 tax return   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file a return. Amend my 2012 tax return This is an information reporting requirement and does not change the exempt-interest dividends to taxable income. Amend my 2012 tax return Alternative minimum tax treatment. Amend my 2012 tax return   Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. Amend my 2012 tax return See Alternative Minimum Tax (AMT) in chapter 30 for more information. Amend my 2012 tax return Dividends on insurance policies. Amend my 2012 tax return    Insurance policy dividends the insurer keeps and uses to pay your premiums are not taxable. Amend my 2012 tax return However, you must report as taxable interest income the interest that is paid or credited on dividends left with the insurance company. Amend my 2012 tax return    If dividends on an insurance contract (other than a modified endowment contract) are distributed to you, they are a partial return of the premiums you paid. Amend my 2012 tax return Do not include them in your gross income until they are more than the total of all net premiums you paid for the contract. Amend my 2012 tax return Report any taxable distributions on insurance policies on Form 1040, line 21. Amend my 2012 tax return Dividends on veterans' insurance. Amend my 2012 tax return   Dividends you receive on veterans' insurance policies are not taxable. Amend my 2012 tax return In addition, interest on dividends left with the Department of Veterans Affairs is not taxable. Amend my 2012 tax return Patronage dividends. Amend my 2012 tax return   Generally, patronage dividends you receive in money from a cooperative organization are included in your income. Amend my 2012 tax return   Do not include in your income patronage dividends you receive on: Property bought for your personal use, or Capital assets or depreciable property bought for use in your business. Amend my 2012 tax return But you must reduce the basis (cost) of the items bought. Amend my 2012 tax return If the dividend is more than the adjusted basis of the assets, you must report the excess as income. Amend my 2012 tax return   These rules are the same whether the cooperative paying the dividend is a taxable or tax-exempt cooperative. Amend my 2012 tax return Alaska Permanent Fund dividends. Amend my 2012 tax return    Do not report these amounts as dividends. Amend my 2012 tax return Instead, report these amounts on Form 1040, line 21; Form 1040A, line 13; or Form 1040EZ, line 3. Amend my 2012 tax return How To Report Dividend Income Generally, you can use either Form 1040 or Form 1040A to report your dividend income. Amend my 2012 tax return Report the total of your ordinary dividends on line 9a of Form 1040 or Form 1040A. Amend my 2012 tax return Report qualified dividends on line 9b of Form 1040 or Form 1040A. Amend my 2012 tax return If you receive capital gain distributions, you may be able to use Form 1040A or you may have to use Form 1040. Amend my 2012 tax return See Exceptions to filing Form 8949 and Schedule D (Form 1040) in chapter 16. Amend my 2012 tax return If you receive nondividend distributions required to be reported as capital gains, you must use Form 1040. Amend my 2012 tax return You cannot use Form 1040EZ if you receive any dividend income. Amend my 2012 tax return Form 1099-DIV. Amend my 2012 tax return   If you owned stock on which you received $10 or more in dividends and other distributions, you should receive a Form 1099-DIV. Amend my 2012 tax return Even if you do not receive Form 1099-DIV, you must report all your dividend income. Amend my 2012 tax return   See Form 1099-DIV for more information on how to report dividend income. Amend my 2012 tax return Form 1040A or 1040. Amend my 2012 tax return    You must complete Schedule B (Form 1040A or 1040), Part II, and attach it to your Form 1040A or 1040, if: Your ordinary dividends (Form 1099-DIV, box 1a) are more than $1,500, or You received, as a nominee, dividends that actually belong to someone else. Amend my 2012 tax return If your ordinary dividends are more than $1,500, you must also complete Schedule B (Form 1040A or 1040), Part III. Amend my 2012 tax return   List on Schedule B (Form 1040A or 1040), Part II, line 5, each payer's name and the ordinary dividends you received. Amend my 2012 tax return If your securities are held by a brokerage firm (in “street name”), list the name of the brokerage firm shown on Form 1099-DIV as the payer. Amend my 2012 tax return If your stock is held by a nominee who is the owner of record, and the nominee credited or paid you dividends on the stock, show the name of the nominee and the dividends you received or for which you were credited. Amend my 2012 tax return   Enter on line 6 the total of the amounts listed on line 5. Amend my 2012 tax return Also enter this total on line 9a of Form 1040A or 1040. Amend my 2012 tax return Qualified dividends. Amend my 2012 tax return   Report qualified dividends (Form 1099-DIV, box 1b) on line 9b of Form 1040 or Form 1040A. Amend my 2012 tax return The amount in box 1b is already included in box 1a. Amend my 2012 tax return Do not add the amount in box 1b to, or substract it from, the amount in box 1a. Amend my 2012 tax return   Do not include any of the following on line 9b. Amend my 2012 tax return Qualified dividends you received as a nominee. Amend my 2012 tax return See Nominees under How to Report Dividend Income in chapter 1 of Publication 550. Amend my 2012 tax return Dividends on stock for which you did not meet the holding period. Amend my 2012 tax return See Holding period , earlier under Qualified Dividends. Amend my 2012 tax return Dividends on any share of stock to the extent you are obligated (whether under a short sale or otherwise) to make related payments for positions in substantially similar or related property. Amend my 2012 tax return Payments in lieu of dividends, but only if you know or have reason to know the payments are not qualified dividends. Amend my 2012 tax return Payments shown in Form 1099-DIV, box 1b, from a foreign corporation to the extent you know or have reason to know the payments are not qualified dividends. Amend my 2012 tax return   If you have qualified dividends, you must figure your tax by completing the Qualified Dividends and Capital Gain Tax Worksheet in the Form 1040 or 1040A instructions or the Schedule D Tax Worksheet in the Schedule D (Form 1040) instructions, whichever applies. Amend my 2012 tax return Enter qualified dividends on line 2 of the worksheet. Amend my 2012 tax return Investment interest deducted. Amend my 2012 tax return   If you claim a deduction for investment interest, you may have to reduce the amount of your qualified dividends that are eligible for the 0%, 15%, or 20% tax rate. Amend my 2012 tax return Reduce it by the qualified dividends you choose to include in investment income when figuring the limit on your investment interest deduction. Amend my 2012 tax return This is done on the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet. Amend my 2012 tax return For more information about the limit on investment interest, see Investment expenses in chapter 23. Amend my 2012 tax return Expenses related to dividend income. Amend my 2012 tax return   You may be able to deduct expenses related to dividend income if you itemize your deductions on Schedule A (Form 1040). Amend my 2012 tax return See chapter 28 for general information about deducting expenses of producing income. Amend my 2012 tax return More information. Amend my 2012 tax return    For more information about how to report dividend income, see chapter 1 of Publication 550 or the instructions for the form you must file. Amend my 2012 tax return Prev  Up  Next   Home   More Online Publications