What is the tax rate for dividends?

In Arizona, the tax rate for dividends generally depends on the type of dividend. Qualified dividends are generally taxed at a flat rate of 4.54%. This rate applies to dividends from domestic corporations, qualified foreign corporations, and mutual funds. Nonqualified dividends, such as those from foreign stocks, are usually taxed at the same rate as ordinary income. In 2020, the income tax rate in Arizona is 4.5% for the first $26,500 of taxable income and 5.5% for the next $20,000 of taxable income. Therefore, the maximum tax rate for nonqualified dividends is 5.5%. Capital gains from the sale of stocks are generally taxed at a lower rate than dividends. In 2020, the tax rate for long-term capital gains is 4.54%. Short-term capital gains are taxed at the same rate as ordinary income.

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What is the tax rate for dividends?

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