 The category of qualified dividend (as opposed to an ordinary dividend) was created in the Bush tax cuts of 2003 - previously, there was no distinction and all dividends were either untaxed or taxed together at the same rate.To qualify for the qualified dividend rate, the payee must own the stock for a long enough time, generally 60 days for common stock and 90 days for preferred stock.To qualify for the qualified dividend rate, the dividend must also be paid by a corporation in the U.S. or with certain ties to the U.S.

To be taxed at the qualified dividend rate, the dividend must