How Are Dividends Taxed? 2025 and 2026 Dividend Tax Rates

Like other earnings and realized gains on investments, dividend income is taxable. The tax rate on dividends, however, is dependent on a number of factors, including your taxable income, the type of dividend, and the kind of account that holds the investment. This means that the amount of the tax you owe on dividends can vary.

Maybe you're asking, "How are dividends taxed?" Let's take a closer look at the various factors that can affect how much tax you owe on the dividends you earned in 2025 or may earn in 2026.

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An infographic explaining how stock dividends are taxed depending on the circumstances. — Image source: The Motley Fool.

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Taxable Income

Taxable income is the amount of income subject to taxation after deductions and exemptions.

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Data source: IRS.
2025 Qualified Dividend Tax Rate	For Single Taxpayers	For Married Couples Filing Jointly	For Heads of Household
0%	Up to $48,350	Up to $96,700	Up to $64,750
15%	$48,350 to $533,400	$96,700 to $600,050	$64,750 to $566,700
20%	More than $533,400	More than $600,050	More than $566,700

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The next table presents the tax rates assessed on ordinary or nonqualified dividends in 2025, depending on your taxable income and filing status.

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Data source: IRS.
2025 Ordinary Dividend Tax Rate	For Single Taxpayers	For Married Couples Filing Jointly	For Heads of Household
10%	Up to $11,925	Up to $23,850	Up to $17,000
12%	$11,925 to $48,475	$23,850 to $96,950	$17,000 to $64,850
22%	$48,475 to $103,350	$96,950 to $206,700	$64,850 to $103,350
24%	$103,350 to $197,300	$206,700 to $394,600	$103,350 to $197,300
32%	$197,300 to $250,525	$394,600 to $501,050	$197,300 to $250,500
35%	$250,525 to $626,350	$501,050 to $751,600	$250,500 to $626,350
37%	Over $626,350	Over $751,600	Over $626,350

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Data source: IRS.
2026 Qualified Dividend Tax Rate	For Single Taxpayers	For Married Couples Filing Jointly	For Heads of Household
0%	Up to $49,450	Up to $98,900	Up to $66,200
15%	$49,450 to $545,500	$98,900 to $613,700	$66,200 to $579,600
20%	More than $545,500	More than $613,700	More than $579,600

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The next table presents the tax rates assessed on ordinary or nonqualified dividends in 2026, depending on your taxable income and filing status.

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Data source: IRS.
2026 Ordinary Dividend Tax Rate	For Single Taxpayers	For Married Couples Filing Jointly	For Heads of Household
10%	$0 to $12,400	$0 to $24,800	$0 to $17,700
12%	$12,401 to $50,400	$24,801 to $100,800	$17,701 to $67,450
22%	$50,401 to $105,700	$100,801 to $211,400	$67,451 to $105,700
24%	$105,701 to $201,775	$211,401 to $403,550	$105,701 to $201,775
32%	$201,776 to $256,225	$403,551 to $512,450	$201,776 to $256,200
35%	$256,226 to $640,600	$512,451 to $768,700	$256,201 to $640,600
37%	$640,601 or more	$768,701 or more	$640,601 or more

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To summarize, here's how dividends are taxed, provided that the underlying dividend stocks are held in a taxable account:

Qualified dividends are taxed at 0%, 15%, or 20%, depending on your income level and tax filing status.
Ordinary (nonqualified) dividends and taxable distributions are taxed at your marginal income tax rate, which is determined by your taxable earnings.

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The Net Investment Income Tax is an additional 3.8% tax that applies to dividend income as well as to realized gains. It increases the effective total tax rate on dividends and other investment income.

Yet even with this surcharge, qualified dividends are taxed at significantly preferential rates compared to regular income. The tax break doesn't reduce the risk of investing in the underlying stock, but it does allow you to keep more of your hard-earned gains for yourself.

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About the Author

Jason Hall is a contributing Motley Fool stock market analyst with more than a decade of experience writing about dividend stocks and long-term investing. He has been with the company since 2012 and previously spent over 10 years in technical sales in the printing and information services industry. Jason also founded and operated a small food manufacturing business.

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