A payment by a company to its shareholders of record. A dividend is usually paid as cash, though it can be stock. In a nonqualified deferred compensation plan, dividends on company shares may or may not be credited. Dividend income is reported to you on Form 1099-DIV. The top rate of tax on “qualified” dividends is 15%, but for lower-income people the rate is 0% through 2010. Nonqualified dividends are taxed at ordinary income rates. To get the qualified rate of 15%, you must hold a stock for a 61-day period in the 121-day window that begins 60 days before the ex-dividend date (this window changed from 120 days in the original law). The special qualified status is scheduled to expire after 2010, and in 2011 the dividend tax rates may thus rise to ordinary income rates, or may go to 20% for the top tax brackets (depending on action by Congress).