Dividend Tax Calculator (2026 and 2027)

Federal tax on the dividends only, computed with the same method as the calculator (standard deduction assumed for the NIIT estimate):

As of Nov 10, 2026, SCHD yields 2.96% and Realty Income Corporation (O) yields 5.48%. $100,000 in SCHD pays about $2,959 a year, mostly qualified dividends. $100,000 in O pays about $5,480, mostly ordinary REIT dividends. For a single filer with $90,000 of other taxable income in 2026:

• SCHD: $444 of federal tax (15.0%), keeping $2,515.
• O with the 199A deduction: $964 (17.6%), keeping $4,516. Without the deduction it would be $1,206.

The REIT still leaves more after tax here because its yield is higher, but it loses a bigger share to tax. That is why many investors hold REITs in an IRA or Roth and qualified payers in taxable accounts. This assumes every dollar is the type shown; your 1099-DIV will split each fund's payout exactly.

The rate depends on your total taxable income, dividends included. Thresholds from IRS Rev. Proc. 2025-32 (2026) and Rev. Proc. 2026-35 (2027):

Above the 15% limit the rate is 20%. Qualifying surviving spouses use the married filing jointly amounts.

Non-qualified dividends are taxed at these rates. Each rate applies to taxable income up to the amount shown (IRS Rev. Proc. 2025-32):

The calculator follows the IRS Qualified Dividends and Capital Gain Tax Worksheet from the Form 1040 instructions:

Taxable income = other taxable income + ordinary dividends + qualified dividends − Section 199A deduction

Ordinary part = taxable income − qualified dividends, taxed at the regular brackets

Qualified dividends fill the space from the ordinary part up to taxable income: 0% below the first limit, 15% to the second, 20% above

NIIT = 3.8% × the smaller of (dividends) or (modified AGI − threshold)

The tax on your dividends is the tax on the full return minus the tax without the dividends. That is why the same $1,000 of qualified dividends can cost $0 for one person and $150 or $200 for another. If you choose "before deductions", the calculator subtracts the basic standard deduction for your filing status ($16,100 single, $32,200 married filing jointly in 2026). Itemizers, people 65 or older, and anyone with capital gains should enter taxable income directly.

Net investment income tax. On top of the rates above, 3.8% applies to investment income once modified AGI passes $200,000 (single or head of household), $250,000 (married filing jointly) or $125,000 (married filing separately). These amounts are fixed in the tax code (section 1411) and have not changed since 2013. The top federal rate on qualified dividends is therefore 23.8%, and 40.8% on ordinary dividends.

Section 199A deduction. Ordinary REIT dividends reported in box 5 of Form 1099-DIV can be cut by 20% before tax. The 2025 tax law (Public Law 119-21) made this permanent. It doesn't reduce the NIIT, and it is capped at 20% of your taxable income minus qualified dividends and capital gains.

• Traditional IRA and 401(k): no tax on dividends each year. Withdrawals are taxed as ordinary income, so qualified rates never apply.
• Roth IRA and Roth 401(k): no tax each year, and qualified withdrawals are tax-free.
• HSA: no tax when paid; withdrawals for medical costs are tax-free.

Since ordinary dividends lose more to tax, REITs, BDCs and high-yield bond funds are often held in these accounts. To see how tax changes long-term growth, set the account type in the DRIP calculator. For the rules in more detail, read how dividends are taxed.

This calculator estimates U.S. federal income tax on dividends using the IRS 2026 and 2027 figures (IRS Rev. Proc. 2025-32; IRS Rev. Proc. 2026-35). It is for education only, not tax advice. It ignores credits, the AMT, other investment income and state-specific rules. Check with a tax professional.