Dividends Taxable
March 20th, 2008
If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Question: Are All Dividends Taxable To The State of PA?
Can anyone help me with one very specific question? I received about $1,700- in dividends from an Employee Stock Savings Plan that is continually reinvested in the stock of the company. For federal purposes it is a reportable dividend but qualifies as a capital gain subject to 0% tax that must be shown on the 1040. Is this amount Pa state taxable income? The State guide says " Dividends distributed by a corp. to its stockholders as stock is not taxable if the dividend is not personal income for Federal purposes". Some people still tell me to report it. Any help out there?
Answer: Great question. Some dividends are not taxable by PA, but in this case, you are out of luck. Just because the tax rate is 0% for the IRS does not mean they are not "taxable" by the IRS. They are taxable and the tax rate is 0%. I know this is confusing. When you file your 1040, you will enter the dividends on line 9a of the tax return as well as 9b. Later on, the tax will be 0%, but they are still adding to your personal income.
I like the way you're thinking, though. You might make a good attorney. The text I use is: "A stock dividend is not taxable for Pennsylvania Personal Income Tax purposes. A stock dividend is a pro rata distribution by a corporation to its stockholders in the form of stock if the distribution is not treated as income for Federal income tax purposes. If the stock distribution is not taxable, the tax basis of the old stock is adjusted to reflect the additional shares."
If what you got was sent to you on a 1099-DIV and there is an amount in box 1...then unfortunately, this dividend is not one that qualifies as exempt from PA taxable income. Sorry.
Strategic Global Income Fund, Inc. - Distribution Characteristics for December 2009
NEW YORK----Strategic Global Income Fund, Inc. , a non-diversified, closed-end management investment company seeking a high level of current income as a primary objective and capital appreciation as a secondary objective through investments in US and foreign debt securities, today announced its distribution characteristics for the month of December 2009.
MeltDown #426 EMERGENCY ECONOMIC STABILIZATION
Posted in 
Tags: