Stock dividends are taxed at Long Term Capital Gains Rates.

Name: Stock dividends are taxed at Long Term Capital Gains Rates.
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Stock dividends are typically taxed at the same rate as ordinary income, which can include federal and state income tax as well as Social Security and Medicare taxes. However, if the stock dividend is considered a qualified dividend, it may be taxed at the long-term capital gains rate, which is generally lower than the ordinary income tax rate.

Stock Dividends Are Taxed at Long Term Capital Gains Rates