Qualified Dividends
Dividends taxed at the lower long-term capital-gains rates rather than ordinary income rates.
Qualified dividends are dividends that meet IRS holding-period and source requirements, which makes them eligible for the preferential long-term capital-gains tax rates of 0%, 15%, or 20% — substantially lower than the ordinary rates that apply to non-qualified (ordinary) dividends. Most dividends from U.S. stocks and many foreign stocks held long enough qualify.
The distinction affects how tax-efficient an investment is in a taxable account. A fund throwing off qualified dividends is gentler on your tax bill than one paying ordinary dividends or interest. As with capital gains, the 0% rate at lower incomes creates planning room — qualified dividend income can sometimes be received tax-free in low-income retirement years, though it still counts toward MAGI for ACA and IRMAA purposes.
This definition is general information to help you understand a term, not financial, tax, or legal advice. Figures that change year to year (limits, thresholds, rates) should be confirmed against current official sources. For guidance on your situation, a licensed fee-only fiduciary is the right next step.