“Can Your Company Get a Tax Break for Dividends? | Financial Experts Explain”

– The dividends-received deduction is available to C corporations when they receive dividends.
– The deduction is typically 50% of the dividend, reducing the amount of the dividend subject to tax.
– If a corporation owns 20% or more of the payor’s stock, the deductible percentage of the dividend increases to 65%.
– Dividends from an affiliated group member are 100% deductible if certain ownership tests are met.
– Special rules apply when one or more group members are subject to foreign taxes. – To qualify for the dividends-received deduction, the stock must be held for at least 46 days during the 91-day period beginning 45 days before the ex-dividend date.
– For dividends on preferred stock lasting more than 366 days, the holding period requirement is extended to 91 days during the 181-day period beginning 90 days before the ex-dividend date.
– The deduction is limited to 50% of the recipient corporation’s taxable income, but this limitation doesn’t apply if it would result in a net operating loss deduction.
– If a corporation with less than 20% ownership receives $50,000 in dividends and has a $10,000 loss from regular operations, the deduction would be limited to $20,000 instead of $25,000. 1. Tax Insights found that many small businesses are struggling to keep up with changing tax laws and regulations.
2. The latest post from Tax Insights discusses the impact of remote work on tax filing requirements for employees and employers.
3. Tax Insights highlights the importance of staying informed about potential tax breaks and credits that could benefit individuals and businesses.
4. The latest Tax Insights post examines the potential impact of proposed tax reform on different industries and taxpayers.
5. Tax Insights provides helpful tips for maximizing deductions and credits when filing taxes.

Is Your Corporation Eligible for the Dividends-Received Deduction?