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The following will assist with the entry of Form 1099-DIV when the income belongs to either another person or multiple taxpayers.

Per IRS Publication 550 Investment Income and Expenses (Including Capital Gains and Losses), page 23:

Nominees. If you received ordinary dividends as a nominee (that is, the dividends are in your name but actually belong to someone else), include them on line 5 of Schedule B (Form 1040 or 1040-SR). Several lines above line 6, put a subtotal of all dividend income listed on line 5. Below this subtotal, enter “Nominee Distribution” and show the amount received as a nominee. Subtract the total of your nominee distributions from the subtotal. Enter the result on line 6.

If you received a capital gain distribution or were allocated an undistributed capital gain as a nominee, report only the amount that belongs to you on Form 1040 or 1040-SR, line 7b; or Schedule D (Form 1040 or 1040-SR), line 13, whichever is appropriate. Attach a statement to your return showing the full amount you received or were allocated and the amount you received or were allocated as a nominee.

File Form 1099-DIV with the IRS. If you received dividends as a nominee in 2019, you must file a Form 1099-DIV (or Form 2439) for those dividends with the IRS. Send the Form 1099-DIV with a Form 1096 to your Internal Revenue Service Center by February 28, 2020 (April 1, 2020, if you file Form 1099-DIV electronically). Give the actual owner of the dividends Copy B of the Form 1099-DIV by January 31, 2020. On Form 1099-DIV, you should be listed as the “Payer.” The other owner should be listed as the “Recipient.” You do not, however, have to file a Form 1099-DIV to show payments for your spouse. For more information about the reporting requirements and the penalties for failure to file (or furnish) certain information returns, see the General Instructions for Certain Information Returns and the Instructions for Form 2439.

Note. This is completed for you automatically by the TaxAct program if Lines 15, 16 or 17 of Federal Form 1099-DIV are completed (in the Q&A that would be on the screen titled Dividend Income - Nominee in the appropriate field.

This would only need to be done on the taxpayer's return to which the Form 1099-DIV was issued (i.e. the person whose social security number was listed on the form issued by the financial institution). The other taxpayers' return(s) would include the amount from the Form 1099-DIV issued by you to them as outlined below.

TIP: If you received dividend income as a nominee, you must give the actual owner a Form 1099-DIV unless the owner is your spouse. You must also file a Form 1096 and a Form 1099-DIV with the IRS. For more details, see the General Instructions for Certain Information Returns (Forms 1098, 1099, 3921, 3922, 5498, and W-2G) and the Instructions for Form 2439. The Instructions for Form 1099-DIV may also be helpful.

Note. The IRS uses this process to receive ownership information that helps determine which return will contain the income.

To enter or review information from Form 1099-DIV Dividend Income:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
  2. Click Investment Income to expand the category and then click Dividend income (Form 1099-DIV)
  3. Click +Add Form 1099-DIV to create a new copy of the form or click Review to review a form already created 
  4. Click Quick Entry or Step-by-Step Guidance 
    1. If you select Quick Entry, fill in the form to match your paper copy of Form 1099-DIV and be sure to scroll down to answer questions. You may need to scroll down to locate Lines 15, 16 and/or 17.
    2. If you select Step-by-Step Guidance, the program will proceed with the interview questions for you to enter or review the appropriate information. Watch for the screen titled Dividend Income - Nominee to enter the nominee portion.

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