Tax-Efficient Dividend Investing (Qualified vs. Non-Qualified)

Any dividend that does not meet the IRS requirements for tax benefits is non-qualified. These are taxed at your ordinary tax rate, which is based on your income.

Non-Qualified dividends usually come from REITs (real estate funds) or bond funds. Certain one-time dividends are also considered Non-Qualified.

The same logic applies to ETFs: While most are qualified, certain speciality or bond ETFs are not.

Source: Wall Street Mojo