What are the dividend tax rates for 2015?


Quick Answer

The tax rate on dividends for 2015 is either 0, 15 or 20 percent depending on the tax bracket of the individual. Dividends are taxed at the same rate as long-term capital gains.

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Full Answer

In the United States, individuals with higher incomes pay a higher percentage of their income in tax than those with lower incomes. These different rates are usually referred to as tax brackets. In 2015, the amount of tax paid is one of 10, 15, 25, 28, 33, 35 or 39.6 percent of the filer's taxable income. The amount of taxable income that determines these brackets is different depending on the filing status of the individual. Filing statuses are single, head of household, married filing separately, or married filing jointly.

Individuals that fall within the 10 or 15 percent tax bracket do not pay tax on dividends. Those in the 25, 28, 33, or 35 percent bracket pay a 15 percent tax on dividends. Anyone paying 39.6 percent of their income in taxes pays a 20 percent tax on dividends.

Although the tax code is subject to change, the tax rates on dividends are fairly stable. These rates were established in the American Taxpayer Relief Act, which was enacted in 2012. Previous versions of the tax code contained dates at which the rates would expire, sometimes called sunset provisions. The American Taxpayer Relief Act contains no such provisions.

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