What is a qualified dividend and are Nicor’s dividends considered qualified?
Under the Jobs and Growth Tax Reconciliation Act of 2003, qualified dividends are dividends paid by U.S. or foreign corporations that meet certain tax criteria. Stockholders may be eligible to receive a lower federal tax rate of 5%-15% on qualified dividend distributions if an Internal Revenue Service (IRS) holding requirement is met. The IRS holding period requirement as of February 19, 2004, states that the shares that paid the qualified dividends must have been held for more than 61 days out of the 121-day period that begins 60 days in advance of the ex-dividend date. For additional information, please refer to the IRS publication “Instructions for Form 1099-DIV” or consult you tax advisor. Nicor does not track this holding period; therefore, we are unable to assist you with this information. In 2005, 100% of the dividends paid by Nicor on its common stock and its three preferred stock issues were considered qualified dividends.
