Dividend taxation in Tax Planner

Question

In Tax Planner, are dividends taxed at the Ordinary Income rate or the Capital Gains Rate?

markus1957 · Answer

If you add a user specified amount in the Qualified Dividends input box, that value will be taxed at the capital gains rate and then deducted from the value in the Dividends box. The remainder is taxed at the ordinary income rate.

So the use case now is that the QDI box can be used to estimate what portion of the total dividends should be taxed at the capital gains rate.