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Form 1099-DIV is the IRS information return that corporations, mutual funds, REITs and brokers use to report dividends and other distributions of $10 or more paid to a shareholder during the year. The payer sends Copy B to the shareholder by February 1, 2027, and files Copy A with the IRS.
The main task is classifying each distribution. A payment to a shareholder can be an ordinary dividend, a qualified dividend, a capital gain distribution, a tax-free return of capital or an exempt-interest dividend, and each goes in a different box. This guide covers the steps in order: confirm the form, classify the payment, fill in the boxes, then file and correct.
Form 1099-DIV at a glance
| Question | Short answer |
| Who files? | Corporations, mutual funds, REITs, and brokers or other nominees that pay dividends or distributions on stock |
| Threshold | $10 or more in dividends or distributions to one person in the year |
| Always file, any amount | When you withheld backup withholding or foreign tax |
| Recipient copies due | February 1, 2027 |
| IRS filing due | March 1, 2027 on paper; March 31, 2027 electronically |
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Step 1: Confirm who gets a Form 1099-DIV
Form 1099-DIV covers distributions a corporation or fund makes on its stock or shares, but some payments called “dividends” go on other forms. These go elsewhere (IRS instructions):
| If you’re paying… | Report it on |
| “Dividends” on credit union share accounts or similar deposit accounts | Form 1099-INT (they’re treated as interest) |
| Substitute payments in lieu of dividends from a securities loan | Form 1099-MISC, box 8 |
| Taxable distributions from life insurance contracts or employee stock ownership plans | Form 1099-R |
| Dividends to foreign persons | Form 1042-S |
Who you don’t file for. No 1099-DIV is needed for exempt recipients, such as corporations, tax-exempt organizations, IRAs, Archer MSAs, HSAs, U.S. and state agencies, and registered securities or commodities dealers. Partnerships, LLCs taxed as partnerships, and sole proprietors are not exempt, so they do get one.
Thresholds. File for $10 or more in dividends, including capital gain and exempt-interest dividends, and for any amount if you withheld backup withholding or foreign tax. For liquidating distributions, the threshold rose from $600 to $2,000 starting with tax year 2026. The IRS guide to information returns and the IRS’s draft update to the 1099-DIV instructions both show $2,000, though the January 2024 instructions still say $600.
Step 2: Classify each distribution
Each distribution is reported by its tax character. The corporation or fund that issued the shares determines the character, and brokers report what the issuer tells them.
Start with earnings and profits
A corporate distribution is a dividend only to the extent the corporation has earnings and profits (E&P), either for the current year or accumulated from earlier years. The IRS defines dividends as “distributions of earnings and profits paid by a corporation to stockholders” (IRS Topic 404).
Anything paid beyond E&P is a nondividend distribution, also called a return of capital. It goes in box 3, not box 1a. The shareholder isn’t taxed on it right away. Instead, it lowers their cost basis in the stock, and once basis reaches zero, further nondividend distributions are taxed as capital gain.
For example, if a corporation with $30,000 of earnings and profits for the year, and none accumulated, distributes $50,000, then $30,000 is a dividend and $20,000 is a return of capital. Special allocation rules apply when a corporation makes several distributions in a year or has accumulated E&P or deficits, so have the corporation’s tax adviser work out the split before forms are prepared.
A corporation that pays nondividend distributions must also file Form 5452 with its income tax return.
Then sort the dividend portion
| Type | What it is | Box | Who pays it |
| Ordinary dividends | All taxable dividends, before any split | 1a | Any corporation or fund |
| Qualified dividends | The part of 1a taxed at capital gain rates | 1b | Domestic and qualified foreign corporations, and funds passing them through |
| Section 199A dividends | Qualified REIT dividends, including those a fund passes through | 5 | REITs, and funds holding REITs |
| Capital gain distributions | Long-term gains a fund or REIT passes to shareholders | 2a | Mutual funds and other RICs, REITs |
| Nondividend distributions | Return of capital beyond E&P | 3 | Any corporation or fund |
| Exempt-interest dividends | Dividends from tax-exempt bond interest | 12 | Mutual funds and other RICs |
| Liquidating distributions | Cash or property paid out in a partial or complete liquidation | 9 (cash), 10 (noncash) | Liquidating corporations |
Liquidating distributions never go in box 1a or 1b.
The qualified dividend question
Whether a dividend is qualified depends partly on how long the shareholder held the stock:
- Common stock: held more than 60 days during the 121-day period that starts 60 days before the ex-dividend date.
- Preferred stock, for dividends covering periods totaling more than 366 days: held more than 90 days during the 181-day period that starts 90 days before the ex-dividend date.
The payer often can’t see each shareholder’s holding period. The instructions say to include in box 1b any dividends for which it’s impractical to determine whether the holding period was met. The shareholder then applies the rule on their own return.
Timing rules that move a distribution into another year
When a mutual fund or REIT declares a dividend in October, November or December, payable to shareholders of record in one of those months, and pays it in January, the dividend counts as paid on December 31. It goes on the earlier year’s Form 1099-DIV.
Step 3: Fill in the boxes
The form’s boxes fall into four groups (IRS instructions).
Dividends (every payer).
- Box 1a: total ordinary dividends, including money market fund dividends.
- Box 1b: qualified dividends, included in 1a.
- Box 3: nondividend distributions.
Fund and REIT boxes.
- Box 2a: total capital gain distributions. Boxes 2b, 2c, 2d and 2f break out special types of gain and are included in 2a.
- Box 2e: section 897 ordinary dividends, the part of 1a that’s gain from dispositions of U.S. real property interests. It’s included in 1a. Only RICs and REITs complete boxes 2e and 2f, and neither is needed for recipients who are U.S. individuals.
- Box 5: section 199A dividends, included in 1a.
- Box 6: investment expenses of a nonpublicly offered fund, included in 1a.
- Box 12: exempt-interest dividends. Box 13 shows the part from specified private activity bonds and is included in 12.
Withholding, foreign tax and FATCA.
- Box 4: federal income tax withheld, usually 24% backup withholding.
- Box 7: foreign tax paid; box 8: the foreign country or U.S. possession.
- Box 11: the FATCA filing requirement checkbox. Check it only if you’re a U.S. payer using this 1099 to meet FATCA (chapter 4) reporting for a U.S. account, or a foreign financial institution reporting under the FATCA election. Otherwise, leave it blank.
- Boxes 14–16: state tax information, if any.
Liquidations.
- Box 9: cash liquidation distributions.
- Box 10: noncash liquidation distributions, at fair market value on the date distributed.
Form 1099-DIV has five copies: Copy A goes to the IRS, Copy B to the recipient, Copy 1 to the state tax department and Copy 2 to the recipient for their state return, where required, and you keep Copy C.
Step 4: Send, file and correct
For tax year 2026, Form 1099-DIV recipient copies are due February 1, 2027, and Copy A is due to the IRS March 1 on paper or March 31 if you e-file. The standard January 31 and February 28 dates fall on a Sunday in 2027, so they move to the next business day (Publication 1099). For every 1099 and W-2 deadline in one place, see our 2027 tax form deadlines.
| Requirement | 2027 due date |
| Furnish Copy B to recipients | Monday, February 1 |
| Furnish Copy B as part of a broker’s consolidated statement | Tuesday, February 16 |
| File paper Copy A with Form 1096 | Monday, March 1 |
| E-file Copy A with the IRS | Wednesday, March 31 |
Consolidated statements get more time. Brokers may send one year-end statement that combines Forms 1099-B, 1099-DIV and 1099-INT. Under Publication 1099, the February 15 due date for Form 1099-B also applies to a consolidated statement. In 2027, February 15 is Presidents’ Day, so the date moves to February 16.
Filing rules shared with other 1099s. These apply to Form 1099-DIV the same way they apply to other information returns:
- E-filing: required if you’ll file 10 or more information returns in a year, counting every form type combined.
- IRIS: for the 2027 season, every e-filed return goes through the IRS’s IRIS system, which requires a Transmitter Control Code (TCC) if you transmit yourself. No TCC yet? See your options for filing through IRIS without one.
- Extensions: Form 8809 gets you 30 extra days to file with the IRS.
- Electronic recipient copies: allowed if the recipient consents.
- Backup withholding: report the year’s total on Form 945.
Our Form 1099-INT guide covers each of these in detail.
Correcting a 1099-DIV
A corrected 1099-DIV is needed whenever a filed form turns out to be wrong, including when a fund or REIT reclassifies a distribution after forms go out. File it as soon as you find the problem, because penalties rise the longer an error stands. Under Publication 1099:
- Wrong amount or wrong box, including a reclassification: file one corrected return with the CORRECTED box checked, and send the recipient a corrected copy.
- Wrong TIN, wrong name, or wrong form type: file two returns, one that zeroes out the original and one new return with the right information.
- E-filed originals: if you were required to e-file the originals, the corrections must be e-filed too.
For how corrections and rejections work in IRIS, see After You E-File Through IRIS.
Want a second set of eyes? With TAB1099, our data analysts review every file before it goes to the IRS, and corrections are included at no extra charge. Contact us to get started.
Penalties
The IRS charges a penalty for each information return that’s late or wrong, and a separate penalty for each late or wrong recipient copy, so one error can mean two penalties. The latest published amounts, for returns due in 2026:
| When the correct return is filed | Penalty per return |
| Up to 30 days late | $60 |
| 31 days late through August 1 | $130 |
| After August 1, or not filed | $340 |
| Intentional disregard | $680, with no maximum |
The IRS hasn’t published amounts for returns due in 2027, so check the penalties page before you file. Annual maximums are lower for small businesses, and penalties can be waived for reasonable cause.
Common Form 1099-DIV errors and how to avoid them
The errors below fall into three groups: bad recipient data, distributions in the wrong box or year, and forms not corrected after a change.
- Name/TIN mismatches. These trigger backup withholding (CP2100) notices and penalty notices. Collect a signed Form W-9 when the account opens, and check names and TINs with the IRS’s free TIN Matching program before you file. Our TIN matching best practices guide walks through the process.
- Skipping backup withholding. You must withhold 24% and report it in box 4 when a shareholder doesn’t give you a TIN, doesn’t certify that they aren’t subject to backup withholding, or has a TIN the IRS says is incorrect and it isn’t fixed. You must also withhold when the IRS notifies you that the shareholder underreported interest or dividends. Section 404(k) dividends paid to employee stock plan participants are the exception.
- Treating a return of capital as a dividend. Amounts paid beyond earnings and profits go in box 3, not box 1a (see Step 2).
- Adding nested boxes together. Boxes 1b, 2e, 5 and 6 are included in 1a; boxes 2b, 2c, 2d and 2f in 2a; box 13 in 12. Adding them to the parent box double-counts the income.
- Reporting January dividends in the wrong year. A fund or REIT dividend declared in October through December and paid in January belongs on the prior year’s form.
- Not correcting forms after a reclassification. If a fund or REIT changes the character of a distribution after you’ve filed, file corrected 1099-DIVs for every affected recipient and send them new copies.
- Breaking recipient-statement rules. Under Publication 1099, Copy B must include a phone number that reaches a person who can answer questions, the mailing can’t include ads, and the envelope needs the legend “Important Tax Return Document Enclosed.” The last two rules don’t apply to statements for section 404(k) dividends.
Frequently asked questions
Does a small private corporation have to file Form 1099-DIV? Yes. Any corporation that pays $10 or more in dividends to a shareholder during the year files a 1099-DIV for that shareholder, unless the shareholder is an exempt recipient such as another corporation.
Does an S corporation file Form 1099-DIV? Only for distributions paid out of accumulated earnings and profits, such as earnings from years when the company was a C corporation. Other S corporation distributions aren’t reported on Form 1099-DIV (IRS instructions).
Do reinvested dividends go on Form 1099-DIV? Yes. Dividends that are reinvested in more shares, rather than paid in cash, are still reported in box 1a (IRS instructions).
Do I send a 1099-DIV to an LLC? It depends on how the LLC is taxed (Publication 1099):
- Taxed as a corporation: no, it’s an exempt recipient.
- Taxed as a partnership: yes, under the LLC’s own EIN.
- Single-member LLC disregarded for tax purposes: yes, under the owner’s name and TIN.
Filing 1099-DIVs with TAB1099
To prepare for 1099-DIV season before year-end:
- Ask your tax adviser to estimate 2026 earnings and profits, so you know whether any distributions are a return of capital.
- Review 2026 distributions by type, including any January payments that count toward 2026.
- Confirm qualified dividend and capital gain amounts with your fund or transfer agent.
- Collect missing W-9s and run TIN Matching.
- Apply for an IRIS TCC if you’ll transmit yourself.
Our 1099 FAQs and resources cover more of the details.
TAB1099 has been an IRS-authorized e-file provider since 2005 and files through IRIS under its own TCC. We handle the whole process, from data conversion and validation to printing, mailing and e-filing, so you don’t need IRIS access or new software. Tab Service Company also undergoes annual SOC 2 Type II audits. Contact us to schedule your 2026 filing.
This article is for general information and is not tax or legal advice. Consult a tax professional about your specific situation.
