If you make a payment that may be a dividend but you are unable to determine whether any part of the payment is a dividend by the time you must file Form 1099-DIV, the entire payment must be reported as a dividend. See regulations under section 6042 for a definition of dividends.

You are not required to report on Form 1099-DIV the following:

Certain distributions commonly referred to as “dividends” are actually interest and are to be reported on Form 1099-INT. These include so-called “dividends” on deposit or on share accounts in cooperative banks, credit unions, domestic building and loan associations, domestic and Federal savings and loan associations, and mutual savings banks.

Qualified dividend income means dividends paid during the tax year from domestic corporations and qualified foreign corporations. See What's New for 2003 on this page.

To qualify for the 5% and 15% capital gains rates, the share of stock to which the dividend relates must be held for more than 60 days of the 120-day period that begins 60 days before the ex-dividend date as defined under section 1(h)(11)(B)(iii). But, see the instructions for Box 1b on page DIV-2.

Qualified foreign corporation.   A foreign corporation is a qualified foreign corporation if it is:

1. Incorporated in a possession of the United States or
2. Eligible for benefits of a comprehensive income tax treaty with the United States that the Secretary determines is satisfactory for this purpose and that includes an exchange of information program.

  

  A list of income tax treaties of the United States that (a) are comprehensive, (b) include an information exchange program, and (c) have been determined by the Treasury Department to be satisfactory for this purpose is expected to be available before the end of 2003.

  If the foreign corporation does not meet either 1 or 2 above, then it may be treated as a qualified foreign corporation for any dividend paid by the corporation if the stock associated with the dividend paid is readily tradable on an established securities market in the United States.

  However, qualified dividends do not include dividends paid by foreign entities that in either the taxable year of the distribution or the preceding taxable year were:

• A foreign investment company (section 1246(b)),
• A passive foreign investment company (section 1297), or
• A foreign personal holding company (section 552).

Report as ordinary dividends in box 1a of Form 1099-DIV dividends distributed under section 404(k) on stock held by an employee stock ownership plan (ESOP) or a tax credit ESOP. If a section 404(k) distribution is made in the same year as a total distribution from the ESOP, you may report the entire amount on Form 1099-R or you may report the dividends on Form 1099-DIV and the remaining amount on Form 1099-R.

For information about reporting dividends on restricted stock, see Rev. Procs. 80-11, 1980-1 C.B. 616, and 83-38, 1983-1 C.B. 773, and Rev. Rul. 83-22, 1983-1 C.B. 17.

If you are required to file Form 1099-DIV, you must provide a statement to the recipient. For information about the requirement to furnish an official or acceptable substitute Form 1099-DIV to recipients in person, by statement mailing, or electronically, see part H in the 2003 General Instructions for Forms 1099, 1098, 5498, and W-2G.

You may enter an “X” in this box if you were notified by the IRS twice within 3 calendar years that the payee provided an incorrect taxpayer identification number (TIN). If you mark this box, the IRS will not send you any further notices about this account.

For more information on a new TIN Matching System offered by the IRS, see the 2003 General Instructions for Forms 1099, 1098, 5498, and W-2G.

Enter dividends, including dividends from money market funds, net short-term capital gains from mutual funds, and other distributions on stock. Include reinvested dividends and section 404(k) dividends. Include as a dividend the amount of the recipient's share of investment expenses that you report in
box 5.

An S corporation reports as dividends on Form 1099-DIV only distributions made during 2003 out of accumulated earnings and profits. See section 1368 for more information.

Enter the portion of the dividends in box 1a that qualify for the 5% and 15% capital gains rates. Include dividends for which it is impractical to determine if the section 1(h)(11)(B)(iii) holding period requirement has been met. See Qualified Dividends on page DIV-1.

Enter total capital gain distributions (long-term). Include all amounts shown in boxes 2b, 2c, 2d, 2e, and 2f.

For more information about reporting amounts in boxes 2a through 2f, see section 1(h). Also, Act section 301(c) of JGTRRA contains transition rules for 2003.

Enter the portion of the capital gain distribution that is taxed at the 5% and 15% capital gains rates.

Enter any amount included in box 2a that is a qualified 5-year gain. See Qualified 5-year gain above.

Enter any amount included in box 2a that is an unrecaptured section 1250 gain from certain depreciable real property.

Enter any amount included in box 2a that is a section 1202 gain from certain qualified small business stock. See Qualified small business stock—RICs above.

Enter any amount included in box 2a that is a 28% rate gain from sales or exchanges of collectibles.

Enter nontaxable distributions, if determinable.

Enter backup withholding. For example, if a recipient does not furnish its TIN to you in the manner required, you must backup withhold at a 28% rate on certain dividend payments reported on this form. Use Form W-9, Request for Taxpayer Identification Number and Certification, to request the TIN of the recipient. For foreign recipients, see Part F in the 2003 General Instructions for Forms 1099, 1098, 5498, and W-2G.

Enter the stockholder's pro rata share of certain amounts deductible by a nonpublicly offered RIC in computing its taxable income. This amount is includible in the stockholder's gross income under section 67(c) and must also be included in box 1a. Do not include any investment expenses in box 1b.

Enter any foreign tax withheld and paid on dividends and other distributions on stock. A RIC must report only the amount it elects to pass through to the shareholder. Report this amount in U.S. dollars.

Enter the name of the foreign country or U.S. possession to which the withheld tax applies.

Boxes 8 and 9 apply only to corporations in partial or complete liquidation. Do not include these amounts in
box 1a or 1b.

Enter cash distributed as part of a liquidation.

Enter noncash distributions made as part of a liquidation. Show the fair market value as of the date of distribution.