Tax Treatment of dividends under ATRA

The American Tax Payer Relief Act of 2012 (ATRA) maintains the special tax treatment of qualified dividends that were in effect prior to 2013 for people below the 39.6% tax bracket.  That means that for most people, qualified dividends are taxed as if they were net capital gains.  For tax payers below the 25% bracket the rate is 0% and for taxpayers above 25% the rate is 15%. 

For taxpayers in the 39.6% tax bracket, the rate for qualified dividends is 20%.

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