Question: what is the federal tax rate on dividends for most investors?
Answer: Dividend tax rates for ordinary dividends (typically those that are paid out from most common or preferred stocks) are the same as standard federal income tax rates, or 10% to 37% for tax year 2020. 1﻿ By comparison, qualified dividends are taxed as capital gains at rates of 20%, 15% or 0% depending on tax bracket.