Spillover Dividend

What is a spillover dividend?

A spillover dividend is a dividend payment in the current year, declared and taxable in the prior year. For example, several closed- and open- end mutual funds companies will declare a dividend with a record date in December 2003 and a payable date of January 2004. In these cases, the dividend is taxable in the year declared, that is 2003.

Why is a dividend paid in 2005 reported on my 2004 1099-DIV Form?

The payer has declared the dividend in 2005; therefore, your financial institution which you have your mutual funds with is required to report the payment in 2004.

Can the dividend payment be deleted from the 2004 1099-DIV form and added to the 2005 1099-DIV form?

The amount cannot be deleted from the 2004 1099-DIV form. Your financial institution is required by IRS regulations to report the dividend payment in 2004.

Why do I have multiple dividend payments on my 1099-DIV form?

The dividend paid in January is a reportable event for the 2005 tax year. In prior years, your financial institution may not have reported the dividend in this way. If you see multiple dividend payments reported on your 1099-DIV form, you should ask your financial institution to clarify. Sometimes, financial institutions make mistakes in reporting your tax information. Make sure you review your 1099 forms carefully.

Can my financial institution correct my prior years' 1099 s?

Yes, financial institutions can correct your prior years' 1099 s. The corrected 1099 will be mailed to you after they have corrected the error.

Will my financial institution pay for the cost of refilling my or my client's returns for the past three years?

It depends on the financial institution. But usually they will. If it is their error, they usually will reimburse  you and your clients for refiling amended returns, upon receipt of a copy of an invoice from a tax preparer.

• Mutual Funds Dividends and Capital Gains Distributions
• What is a substitute dividend?
• Will I receive substitute dividend?
• How will my financial institution reduce the tax impact of substitute dividend?