Capital Gains and Losses - Dividends Received on Restricted Stock

Income received from restricted stocks will be reported to you on your Form W-2 Wage and Tax Statement, and will be reported as wages.

To enter any restricted stock dividends that were also reported in your wages:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Investment Income in the Federal Quick Q&A Topics menu to expand, then click Dividend income (Form 1099-DIV).
  3. Click + Add Form 1099-DIV to create a new copy of the form or click Edit to review a form already created.
  4. Click Quick Entry to scroll down to answer all applicable questions or click Step-by-Step Guidance to proceed with the program interview questions.
  5. On the screen titled Dividend Income - Ordinary Dividends, enter the 1a. Ordinary dividends amount reported in Box 1a of the 1099-DIV you received, then click Continue.
  6. On the screen titled Dividend Income - Restricted Stock Dividends, enter any Restricted stock dividends reported as wages on Form 1040, Line 1, then continue with the interview process to enter all of the appropriate information.

Note. You should still enter the restricted stock income in your wages on Form 1040 U.S. Individual Income Tax Return, Line 1.

Additional Information

Restricted stock is stock that you get from your employer for services you perform. It is non-transferable and subject to a substantial risk of forfeiture. You do not have to include the value of the stock in your income when you receive it. However, if you get dividends on restricted stock, you must include them in your income as wages, not dividends. See "Restricted Property" in IRS Publication 525 Taxable and Nontaxable Income for information on restricted stock dividends.

Related Links

  • IRS Publication 550 Investment Income and Expenses (Including Capital Gains and Losses)

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.