Dividend Tax Comparator
Compare qualified vs ordinary dividend tax treatment and see your estimated savings.
How It Works
Enter your total annual dividend income and select your filing status (Single, Married Filing Jointly, or Head of Household). Then enter your total taxable income — this determines which bracket thresholds apply. The calculator instantly computes the tax you'd owe under qualified dividend treatment (0%, 15%, or 20% long-term capital gains rates) versus ordinary income tax treatment (your full marginal bracket).
The tool also applies the 3.8% Net Investment Income Tax (NIIT) when your income exceeds the applicable threshold ($200k single/HOH, $250k MFJ). The results show you the absolute dollar savings from qualifying dividends, your effective tax rates under each treatment, and your after-tax income. Use this to plan dividend stock selection, tax-loss harvesting, and asset location across taxable vs retirement accounts.
FAQ
What's the difference between qualified and ordinary dividends?
Qualified dividends are paid by U.S. corporations and meet IRS holding period requirements (60 days for common stock within a 121-day window). They are taxed at long-term capital gains rates: 0%, 15%, or 20%, depending on your taxable income. Ordinary dividends include REITs, some ETFs, money market funds, and foreign stocks — these are taxed at your marginal income tax rate.
What is the 3.8% NIIT surtax and who pays it?
The 3.8% Net Investment Income Tax applies to individuals with modified adjusted gross income over $200,000 (single/HOH) or $250,000 (MFJ). It's added on top of your regular capital gains or dividend tax rate, making the effective top qualified dividend rate 23.8%.
Do ordinary dividends push me into a higher tax bracket entirely?
No. Even IRS tax tables are graduated. If a portion of your ordinary dividends pushes you into a higher bracket, only that portion is taxed at the higher rate. The calculator accounts for this with bracket slice calculations.
How does my income bracket affect qualified dividend rates?
Qualified dividends sit on top of your regular income. Your tax bracket is determined by total taxable income, which includes all income sources. The calculator uses your total taxable income input to determine which qualified dividend rate tier (0%, 15%, 20%) applies.
How do I calculate the tax-equivalent yield of dividend income?
Tax-equivalent yield = after-tax dividend yield / (1 - ordinary tax rate). This tells you what taxable bond yield you'd need to match your after-tax dividend return. For example, a 3% qualified dividend taxed at 15% has an after-tax yield of 2.55%. To get 2.55% after-tax from a bond taxed at 24%, you'd need a 3.36% bond yield.
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