How to report foreign dividend income

Published on March 13, 2026

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How to report foreign dividend income on a US tax return

Many Americans abroad receive dividends from non-US investments but are unsure how to report them on their US tax return.

If you’re a US expat, reporting foreign dividend income is usually less complicated than people expect. The IRS still requires dividend income to be reported as part of your worldwide income, even if it came from a foreign broker, a non-US company, or an overseas investment account.

The challenge is that foreign banks and brokers often do not issue the US tax forms that many taxpayers are familiar with. For example, a UK or Australian brokerage account may provide only an annual investment statement or dividend summary rather than Form 1099-DIV.

Step-by-step: How to report foreign dividend income

Determine the gross dividend amount before any foreign tax withholding
Convert the dividend and any tax withheld into US dollars
Report the dividends on Form 1040 (Dividend Income)
File Schedule B if required
Claim a Foreign Tax Credit on Form 1116 if foreign tax was withheld

Where do you report foreign dividend income on a US tax return?

Foreign dividends are reported in the same place as US dividends. You report them on Form 1040, which is the main US individual tax return.

If certain conditions apply, you may also need to file Schedule B, which reports sources of interest and dividend income and includes disclosure questions about foreign financial accounts.

Here’s the basic flow most people follow:

Form	What it reports
Form 1040	Your dividends are reported on Form 1040. This includes both US and foreign dividends
Schedule B	Generally required if your ordinary dividends exceed US$1,500.

You may also need to file Schedule B if you had a financial interest in or signature authority over a foreign financial account, even when your dividends are below this amount, because the form includes disclosure questions about foreign accounts

Note: Additionally, foreign brokerage accounts or foreign assets may also trigger additional US reporting requirements, depending on the value and type of the assets held, such as:

Schedule B Part III foreign-account questions

possibly FBAR / FinCEN Form 114 if thresholds are met

possibly Form 8938 if FATCA thresholds are met

possibly Form 8621 for PFIC holdings

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What if I receive a Form 1099-DIV?

If you receive a Form 1099-DIV, you generally use it to report your dividend income on your US tax return. If you use a US broker, you might receive this form, which summarizes your dividend income for the year.

The form usually shows:

Your total dividends
The portion that may qualify for lower tax rates
Sometimes, any foreign tax that was already withheld

What if my foreign broker does not issue a 1099-DIV?

That’s very normal for expats. Foreign banks and brokers often do not issue US tax forms.

In that situation, you typically use your brokerage statements or dividend reports to determine the total dividends and any foreign tax withheld. For example, if a dividend of US$100 was paid and US$15 tax was withheld, you report the full US$100 dividend on your US tax return.

Most people total up:

Dividends received (the full amount before tax was taken out, not just what was deposited into your account)
Any foreign tax withheld
Any portion that may qualify for lower dividend tax rates, if you can support it with your records

Are foreign dividends qualified or ordinary?

Foreign dividends can be either qualified or ordinary, depending on whether they meet certain IRS requirements under IRC.

If the dividend comes from a qualified foreign corporation, such as a company located in a US tax treaty country or a company whose stock is traded on an established US exchange, and you meet the required holding period rules, it may be treated as a qualified dividend and taxed at the lower long-term capital gains rates.

If these requirements are not met, the dividend is treated as an ordinary dividend and taxed at your regular income tax rate.

What’s the difference between qualified and ordinary dividends?

Ordinary dividends are the default. A dividend is only treated as qualified if it meets specific IRS requirements. If those requirements are not met, the dividend is taxed at ordinary income tax rates. Most people need to look at two things:

Dividend type	Tax rate	Typical source
Qualified dividend	Lower capital gains rates	US stocks, some treaty companies
Ordinary dividend	Regular income rates	Non-qualified companies, short holding periods

1. How does this differ for non-US individuals?

Foreign individuals generally do not need to distinguish between qualified and ordinary dividends the way US taxpayers do. That distinction mainly matters for US citizens and tax residents filing Form 1040, since qualified dividends may be taxed at lower capital gains rates.

For most foreign individuals, US dividends are subject to a 30% withholding tax, unless a tax treaty reduces the rate. Because the tax is withheld at the source, whether a dividend is qualified or ordinary typically does not affect how foreign individuals are taxed.

These rules are outlined in IRS Publication 519 (US tax guide for Aliens) and the Form 1040-NR instructions.

📌 Key takeaway: Foreign individuals generally do not need to distinguish between qualified and ordinary dividends the way US taxpayers do. For many foreign investors, US dividends are instead subject to withholding tax, which US tax treaties often reduce to about 15% for residents of many countries.

2. What is the holding period rule?

Even if the company itself could qualify, you still need to meet the holding period rule, which means you must own the investment for a minimum period of time. For common stock, the shares must generally be held more than 60 days during the 121-day period beginning 60 days before the ex-dividend date, while preferred stock may follow different holding-period rules.

If you buy and sell the stock quickly around the dividend date, the dividend may be treated as ordinary income rather than a qualified dividend.

How to avoid using the wrong tax rate

To avoid this, taxpayers should identify the correct type of income, review the applicable IRS rules, and confirm the proper tax rate before filing. Guidance from IRS publications, form instructions, and official tax resources can help ensure the correct rate is applied.

Using the wrong tax rate can lead to incorrect tax calculations, underpayment penalties, or delays in processing a tax return. This often happens when income types are misunderstood or when taxpayers apply the wrong rules to items like dividends, capital gains, or foreign income.

Quick checklist before filing:

Identify the type of income (dividends, capital gains, foreign income, etc.)
Confirm whether the income has special tax treatment or rates
Review the relevant IRS form instructions or publications
Verify that the correct tax rate is applied before submitting the return

1. If I have a 1099-DIV, what should I do?

If you receive Form 1099-DIV, review it and report the dividend amounts on your Form 1040 when filing your tax return. The form shows ordinary dividends, qualified dividends, and capital gain distributions, which may be taxed at different rates. IRS Publication 550 and the Form 1040 instructions explain how to report this income correctly.

2. If I don’t have a 1099-DIV, what should I do?

If you cannot confirm that the dividend qualifies for the lower tax rate, it is usually safer to report it as ordinary income. Many expats simply report the dividend as ordinary income if the qualification is unclear.

If you want to treat it as qualified without a 1099-DIV, you should be comfortable explaining why the company qualifies and showing that you met the holding period rule.

3. What’s a common US expat mistake here?

Assuming a “foreign dividend” automatically means it is qualified because it looks like a normal stock dividend. Sometimes it is. Sometimes it isn’t. Guessing is how people end up using the wrong tax rate.

Do not assume a dividend is qualified just because it comes from a well-known international company.

To qualify for the lower tax rate, the dividend must meet specific IRS requirements, including rules about the type of company and how long you held the shares.

How are foreign taxes on dividends handled?

Foreign taxes withheld on dividends usually do not remove the US tax obligation, but you may be able to claim relief for those taxes. If you’re a US expat, foreign dividend income often comes with another surprise: tax may already be taken out before the dividend reaches your account.

That foreign withholding doesn’t mean the dividend is no longer taxable in the US. You still usually report the dividend on your US tax return. After that, you look at whether you can claim relief for the foreign tax that was already paid.

When can you claim the Foreign Tax Credit for dividend withholding?

In many cases, you can claim the Foreign Tax Credit, a tax benefit that helps reduce double taxation when the US and another country tax the same income. Dividends are a common example. The credit is generally claimed on:

Schedule 3 (Form 1040), line 1
Form 1116 attached if required

Some taxpayers may be able to claim the credit without filing Form 1116 if they qualify for the simplified election. This usually applies when total foreign taxes paid are US$300 or less (US$600 for married filing jointly) and certain other conditions are met.

Do you automatically get the credit just because tax was withheld?

No. You must claim it on your tax return. If you leave it off, the IRS will not apply it automatically.

Where does Form 1116 come in?

Form 1116 is the form many taxpayers use to calculate the Foreign Tax Credit. It connects your foreign-source income (such as foreign dividends) and the foreign taxes paid on that income.

The form then calculates how much of that foreign tax can be used as a credit against your US tax.

A key point is that the credit is often limited. Even if a foreign country withheld a large amount of tax, you may not be able to use the full amount in the same year.

Do I report the gross dividend or the net amount I received?

You generally report the gross dividend, which is the full amount before any foreign tax is withheld. The gross dividend is the full amount before any foreign tax is withheld.

Then you track the foreign tax withheld separately. If you only report the net amount received, your dividend income can be understated, and your Foreign Tax Credit calculation may not match your records.

Reporting element	What to report
Dividend income	Gross dividend (before foreign tax withholding)
Foreign tax withheld	Track separately for Foreign Tax Credit
Amount received	Net amount after withholding

Do I convert the withholding separately?

Yes. Convert both the dividend amount and the foreign tax withheld into US dollars. This ensures the dividend and withholding amounts match the figures used when calculating your Foreign Tax Credit.