Qualified Dividends and Capital Gain Tax Worksheet 2026
The Qualified Dividends and Capital Gain Tax Worksheet is the part of the Form 1040 instructions that stops your long-term gains being taxed at your ordinary bracket. Enter three figures from your return and this runs all 25 lines, showing which slice lands at 0%, which at 15% and which at 20%.
1
Your return
Three figures off Form 1040. Results update instantly.
2
Tax from the worksheet
2026 rates · Single
TAX ON LINE 25$25,898.00$2,700.00 less than the ordinary rate schedule
At 0% 0%At 15% 100%At 20% 0%
Taxed at 0% (line 9)$0.00
Taxed at 15% (line 17)$30,000.00
Taxed at 20% (line 20)$0.00
Ordinary income (line 5)$120,000.00
Tax on the ordinary part (line 22)$21,398.00
Effective rate on taxable income17.27%
ⓘ
Every threshold comes from IRS Revenue Procedure 2025-32 and the line order follows the worksheet as printed in the Form 1040 instructions. Open Show all 25 lines to compare against the paper version box by box.
IRS Revenue Procedure 2025-32All 25 linesFree to Use
WHAT IT DOES
What the Qualified Dividends and Capital Gain Tax Worksheet Actually Does
Ordinary income fills the 0% band first. Only the room left underneath the threshold gets the 0% rate.
Your return has two kinds of income in it. Wages, interest, non-qualified dividends and short-term gains are taxed on the ordinary rate schedule — 10% through 37%. Qualified dividends and net long-term capital gain get their own schedule: 0%, 15% and 20%.
The worksheet is how a single Form 1040 handles both. It separates the two piles, stacks the preferential income on top of the ordinary income, and taxes each band at its own rate. The stacking order is the part people get wrong: ordinary income uses up the 0% band first, so the 0% rate only reaches whatever space is left.
That is why a filer with $120,000 of wages and $30,000 of qualified dividends pays 15% on all $30,000 — the wages have already filled the 0% band — while a filer with no wages and $40,000 of dividends pays nothing at all.
2026 RATE BANDS
2026 Qualified Dividend and Long-Term Capital Gain Rates
The bands are set by taxable income, not by the size of the gain. These are the 2026 figures from IRS Revenue Procedure 2025-32.
Filing status
0% rate applies up to
15% rate applies up to
20% rate
Single
$49,450.00
$545,500.00
above $545,500.00
Married filing jointly
$98,900.00
$613,700.00
above $613,700.00
Head of household
$66,200.00
$579,600.00
above $579,600.00
Married filing separately
$49,450.00
$306,850.00
above $306,850.00
On top of these, a 3.8% net investment income tax can apply above $200,000.00 of modified AGI for single filers and $250,000.00 for joint filers. That surtax is figured separately on Form 8960 and is not part of this worksheet.
LINE BY LINE
How to Fill Out the 2026 Worksheet, Line by Line
Finish Form 1040 through line 15 before you start: the worksheet reads three numbers from the return and hands one back. Each line below shows what to enter, where the figure comes from, and the mistake people most often make on it. Form 1040 line numbers refer to the 2025 form, the latest final version.
Worksheet line
Form 1040 line
Direction
1
Line 15, taxable income
Into the worksheet
2
Line 3a, qualified dividends
Into the worksheet
3
Line 7a, or Schedule D lines 15 and 16
Into the worksheet
25
Line 16, tax
Out of the worksheet
Lines 1–5: split taxable income into two piles
The first five lines take your taxable income apart: the preferential pile (qualified dividends plus net long-term gain) and the ordinary pile (everything else).
Line
Enter
Where it comes from
Common mistake
1
Your taxable income
Form 1040 line 15
Entering adjusted gross income from line 11. Line 1 is after the standard or itemized deduction.
2
Qualified dividends
Form 1040 line 3a (1099-DIV box 1b)
Entering total ordinary dividends from line 3b. Only the qualified subset goes here.
3
Net capital gain
Smaller of Schedule D line 15 or 16; or Form 1040 line 7a if no Schedule D is required
Entering a loss, or the larger of the two Schedule D lines. A loss or a blank becomes 0.
4
Total preferential income
Line 2 + line 3
None common. Line 4 can exceed line 1; line 10 corrects for that.
5
Ordinary income
Line 1 − line 4, never below 0
Forgetting to floor at zero when dividends and gains exceed taxable income.
Lines 6–9: how much is taxed at 0%
Ordinary income fills the 0% band first. Whatever room is left under the line 6 ceiling is the amount taxed at 0%.
Line
Enter
Where it comes from
Common mistake
6
The 0% ceiling for your filing status
$49,450 single or MFS; $98,900 MFJ or qualifying surviving spouse; $66,200 head of household
Copying last year's figure from an old worksheet or software printout.
7
Smaller of line 1 or line 6
Worksheet
None common.
8
Smaller of line 5 or line 7
Worksheet
Using line 4 instead of line 5. Line 8 is how much of the 0% band ordinary income has already used.
9
Amount taxed at 0%
Line 7 − line 8
Assuming everything under the ceiling is 0%. Only the room above your ordinary income is.
Lines 10–17: how much is taxed at 15%
These lines measure the 15% band the same way: start from the 15% ceiling, take off what ordinary income and the 0% slice already filled, and cap the result at the preferential income left.
Line
Enter
Where it comes from
Common mistake
10
Smaller of line 1 or line 4
Worksheet
Skipping it. When preferential income exceeds taxable income, this is what caps it.
11
Line 9 again
Worksheet
None common.
12
Preferential income still to be taxed
Line 10 − line 11
None common.
13
The 15% ceiling for your filing status
$545,500 single; $306,850 MFS; $613,700 MFJ or QSS; $579,600 head of household
Using the single figure for married filing separately. The MFS ceiling is far lower.
14
Smaller of line 1 or line 13
Worksheet
None common.
15
Income already placed below the 15% band
Line 5 + line 9
Adding line 4 instead of line 5.
16
Room left in the 15% band
Line 14 − line 15, never below 0
Carrying a negative number forward. If line 15 is larger, line 16 is 0.
17
Amount taxed at 15%
Smaller of line 12 or line 16
Taking line 12 alone, which taxes income at 15% that belongs in the 20% band.
Lines 18–21: apply the 15% and 20% rates
Now the slices get their rates. Anything not taxed at 0% or 15% is taxed at 20%.
Line
Enter
Where it comes from
Common mistake
18
Tax on the 15% slice
Line 17 × 0.15
None common.
19
Preferential income taxed at 0% or 15%
Line 9 + line 17
None common.
20
Amount taxed at 20%
Line 10 − line 19
None common. For most filers this is 0.
21
Tax on the 20% slice
Line 20 × 0.20
None common.
Lines 22–25: add the ordinary tax and compare
The ordinary pile is taxed on the regular schedule, then the whole result is checked against what you would owe with no preferential rates at all.
Line
Enter
Where it comes from
Common mistake
22
Ordinary tax on line 5
Tax Table if under $100,000; Tax Computation Worksheet if $100,000 or more
Multiplying line 5 by your top bracket rate. The rate schedule is progressive.
23
Total under preferential rates
Line 18 + line 21 + line 22
None common.
24
Ordinary tax on all of line 1
Tax Table or Tax Computation Worksheet, same rule as line 22
Skipping line 24 because line 23 looks right.
25
Your tax
Smaller of line 23 or line 24, carried to Form 1040 line 16
Carrying line 23 when line 24 is smaller, which happens at low incomes.
Lines 22 and 24 send you to a second table. Under $100,000 it is the Tax Table in the 1040 instructions; at $100,000 or more it is the 2026 Tax Computation Worksheet, which turns the bracket schedule into one multiplication and one subtraction.
WORKED EXAMPLE
2026 Qualified Dividends and Capital Gain Tax Worksheet Example, Filled In
A married couple filing jointly earns $110,000 in wages, receives $15,000 of qualified dividends and sells stock held for several years at a $25,000 long-term gain. Their AGI is $150,000; after the $32,200 2026 standard deduction, taxable income on line 15 of Form 1040 is $117,800.
Line
What it is
Amount
1
Taxable income
$117,800
2
Qualified dividends
$15,000
3
Net long-term capital gain
$25,000
4
Preferential income (2 + 3)
$40,000
5
Ordinary income (1 − 4)
$77,800
6
0% ceiling, married filing jointly
$98,900
7
Smaller of line 1 or 6
$98,900
8
Smaller of line 5 or 7
$77,800
9
Taxed at 0%
$21,100
10
Smaller of line 1 or 4
$40,000
11
Line 9
$21,100
12
Line 10 − line 11
$18,900
13
15% ceiling, married filing jointly
$613,700
14
Smaller of line 1 or 13
$117,800
15
Line 5 + line 9
$98,900
16
Line 14 − line 15
$18,900
17
Taxed at 15%
$18,900
18
Line 17 × 15%
$2,835
19
Line 9 + line 17
$40,000
20
Taxed at 20%
$0
21
Line 20 × 20%
$0
22
Ordinary tax on line 5
$8,840
23
Lines 18 + 21 + 22
$11,675
24
Ordinary tax on line 1
$15,340
25
Tax: smaller of line 23 or 24
$11,675
Their wages fill the first $77,800 of the $98,900 0% band, which leaves $21,100 of room: that much of the dividends and gain is taxed at nothing. The remaining $18,900 falls in the 15% band for $2,835, and nothing reaches 20%. Line 25 comes to $11,675, which is $3,665 less than the $15,340 the same taxable income would cost on the ordinary rate schedule.
Lines 22 and 24 here use the exact 2026 rate schedule. The paper worksheet sends amounts under $100,000 to the Tax Table, which works in $50 steps, so a hand-filled copy can differ by a few dollars.
LINE 16
Qualified Dividends and Capital Gain Tax Worksheet Line 16, Explained
Line 16 is the step people search for most, because it is where the worksheet stops looking like arithmetic. It answers one question: how much room is left in the 15% band after ordinary income and the 0% slice have taken their share?
Line 14: the 15% ceiling, or your taxable income if that is smaller
Line 15: ordinary income (line 5) plus the 0% slice (line 9)
Line 16: line 14 minus line 15, and 0 if that is negative
Line 17: the smaller of line 16 and the preferential income still untaxed (line 12)
In the example above, line 14 is $117,800 and line 15 is $98,900, so line 16 is $18,900. That is far more than the $18,900 on line 12, so all $18,900 lands at 15% and nothing reaches 20%. Line 16 only limits the answer for high earners: once line 15 passes the line 13 ceiling, line 16 is 0 and every remaining dollar of dividends and gain falls through to the 20% rate on line 20.
Don't confuse it with Form 1040 line 16. That is where the worksheet's final answer, line 25, ends up.
COMMON MISTAKES
Six Mistakes That Change the Answer
Starting from AGI. Line 1 is taxable income from Form 1040 line 15, after the deduction. Using line 11 overstates every band calculation.
Using total dividends. Line 2 is Form 1040 line 3a. Line 3b includes non-qualified dividends, which belong in ordinary income.
Carrying a capital loss onto line 3. A net loss enters as 0. The loss has already reduced taxable income through Schedule D.
Using the wrong year's thresholds. Lines 6 and 13 change every year. For 2026 the single 0% ceiling is $49,450.
Skipping line 24. At low incomes the ordinary schedule can beat the preferential computation, and line 25 must take the smaller.
Using this worksheet when Schedule D says not to. An amount on Schedule D line 18 (28% rate gain) or line 19 (unrecaptured section 1250 gain) means the Schedule D Tax Worksheet replaces this one.
If you are estimating 2026 tax during the year rather than filing, the same worksheet appears in Publication 505 as Worksheet 2-7, feeding line 4 of the 2026 Estimated Tax Worksheet.
PRINTABLE 2026 WORKSHEET
Printable 2026 Qualified Dividends and Capital Gain Tax Worksheet (PDF)
A blank copy of all 25 lines with the 2026 thresholds already entered on lines 6 and 13. Use the button to print it or choose Save as PDF in the print dialog. Complete Form 1040 through line 15 before you start.
Qualified Dividends and Capital Gain Tax Worksheet — Form 1040, Line 16 (2026)
1.Enter the amount from Form 1040 or 1040-SR, line 15 (taxable income). If you are filing Form 2555, enter the amount from line 3 of the Foreign Earned Income Tax Worksheet.1. ________
2.Enter the amount from Form 1040 or 1040-SR, line 3a (qualified dividends).2. ________
3.Are you filing Schedule D? Yes: enter the smaller of Schedule D line 15 or line 16; if either is blank or a loss, enter -0-. No: enter the amount from Form 1040 or 1040-SR, line 7a.3. ________
4.Add lines 2 and 3.4. ________
5.Subtract line 4 from line 1. If zero or less, enter -0-.5. ________
6.Enter $49,450 if single or married filing separately, $98,900 if married filing jointly or qualifying surviving spouse, $66,200 if head of household.6. ________
7.Enter the smaller of line 1 or line 6.7. ________
8.Enter the smaller of line 5 or line 7.8. ________
9.Subtract line 8 from line 7. This amount is taxed at 0%.9. ________
10.Enter the smaller of line 1 or line 4.10. ________
11.Enter the amount from line 9.11. ________
12.Subtract line 11 from line 10.12. ________
13.Enter $545,500 if single, $306,850 if married filing separately, $613,700 if married filing jointly or qualifying surviving spouse, $579,600 if head of household.13. ________
14.Enter the smaller of line 1 or line 13.14. ________
15.Add lines 5 and 9.15. ________
16.Subtract line 15 from line 14. If zero or less, enter -0-.16. ________
17.Enter the smaller of line 12 or line 16.17. ________
18.Multiply line 17 by 15% (0.15).18. ________
19.Add lines 9 and 17.19. ________
20.Subtract line 19 from line 10.20. ________
21.Multiply line 20 by 20% (0.20).21. ________
22.Figure the tax on the amount on line 5. Use the Tax Table if line 5 is less than $100,000, or the Tax Computation Worksheet if it is $100,000 or more.22. ________
23.Add lines 18, 21, and 22.23. ________
24.Figure the tax on the amount on line 1. Use the Tax Table if line 1 is less than $100,000, or the Tax Computation Worksheet if it is $100,000 or more.24. ________
25.Tax on all taxable income. Enter the smaller of line 23 or line 24, and include it on Form 1040 or 1040-SR, line 16.25. ________
Line wording from the IRS Form 1040 instructions; 2026 thresholds from IRS Revenue Procedure 2025-32. If Schedule D shows 28% rate gain or unrecaptured section 1250 gain, use the Schedule D Tax Worksheet instead. Source: paycheckscalculator.org/qualified-dividends-and-capital-gain-tax-worksheet
WHICH WORKSHEET
When to Use Schedule D's Worksheet Instead
Two worksheets do similar jobs and the return picks one. Use the Qualified Dividends and Capital Gain Tax Worksheet when your preferential income is plain qualified dividends and net long-term gain. Switch to the Schedule D Tax Worksheet when either of these appears:
28% rate gain — collectibles, and qualified small business stock under section 1202
Unrecaptured section 1250 gain — the depreciation component when you sell rental property
Both carry their own rate ceilings that this worksheet has no line for, which is why they push you to the longer version. If your 1099-DIV and Schedule D show neither, this is the right worksheet.
WHAT QUALIFIES
Which Dividends Are Qualified
Only the qualified subset reaches this worksheet. Form 1040 line 3b is total ordinary dividends; line 3a is the qualified part of that total, and line 3a is what you enter. The rest stays in ordinary income.
Paid by a US corporation or a qualified foreign corporation
Held more than 60 days in the 121-day window starting 60 days before the ex-dividend date
Not on the IRS list of excluded payers — REIT and money-market distributions generally do not qualify
Your 1099-DIV already splits box 1a from box 1b, so you rarely have to make the call yourself
Long-term capital gain follows a different test: the asset has to have been held more than one year. Short-term gain is ordinary income and never reaches the preferential bands.
FREQUENTLY ASKED QUESTIONS
Qualified Dividends and Capital Gain Tax Worksheet FAQ
What is the Qualified Dividends and Capital Gain Tax Worksheet?+
It is the worksheet in the Form 1040 instructions that figures your tax when part of your income is qualified dividends or long-term capital gain. Those amounts get preferential rates of 0%, 15% or 20% instead of your ordinary bracket, and the worksheet is how the return separates the two piles and taxes each correctly.
Who has to use the qualified dividends and capital gains worksheet?+
You use it when you report qualified dividends on Form 1040 line 3a or a net capital gain, and you are not required to use the Schedule D Tax Worksheet instead. If you have 28% rate gain from collectibles or unrecaptured section 1250 gain from depreciated real estate, the Schedule D Tax Worksheet replaces this one.
What are the 2026 qualified dividend tax rates?+
0%, 15% and 20%, set by where your taxable income falls. For 2026 a single filer pays 0% on preferential income up to $49,450.00 of taxable income, 15% from there to $545,500.00, and 20% above that. The bands for married filing jointly are $98,900.00 and $613,700.00.
Why does the worksheet compare two numbers at the end?+
Line 23 is the preferential-rate computation and line 24 is the tax you would owe if everything were taxed at ordinary rates. Line 25 takes the smaller of the two. That safety valve means the worksheet can never produce a larger bill than the plain rate schedule, which matters at low incomes where the ordinary brackets are already below 15%.
What is line 16 on the Qualified Dividends and Capital Gain Tax Worksheet?+
Line 16 is the room left in the 15% band: line 14 (the 15% ceiling or your taxable income, whichever is smaller) minus line 15 (ordinary income plus the amount already taxed at 0%). If the result is negative you enter 0, which means every remaining dollar of dividends and gain is taxed at 20%.
Which Form 1040 lines does the worksheet use?+
It reads taxable income from line 15, qualified dividends from line 3a and capital gain from line 7a (or Schedule D lines 15 and 16), and its answer on line 25 goes to Form 1040 line 16.
Do ordinary dividends count on this worksheet?+
Only the qualified portion. Form 1040 line 3b is total ordinary dividends and line 3a is the qualified subset of it. The worksheet uses line 3a. The non-qualified remainder stays in ordinary income and is taxed at your normal bracket.
Does the worksheet include the 3.8% net investment income tax?+
No. The net investment income tax is a separate 3.8% surtax figured on Form 8960, and it keys off modified adjusted gross income rather than taxable income. The thresholds are $200,000.00 for single filers and $250,000.00 for married filing jointly, and they are not adjusted for inflation.
Can my qualified dividends be taxed at 0%?+
Yes, and it is more common than people expect. The 0% band is filled by your ordinary income first — that is what lines 5 through 9 do — so the 0% rate applies only to whatever room is left underneath the threshold. A filer with little ordinary income and a large dividend can pay nothing on a substantial amount.
What makes a dividend qualified?+
Broadly, it has to be paid by a US corporation or a qualified foreign corporation, and you have to have held the stock for more than 60 days during the 121-day window that starts 60 days before the ex-dividend date. Dividends from REITs, money market funds and employee stock options generally do not qualify. Your 1099-DIV does the classification for you.
Where can I get a printable 2026 Qualified Dividends and Capital Gain Tax Worksheet PDF?+
The IRS prints the worksheet inside the Form 1040 instructions rather than as a separate form, and the 2026 instructions are released around the end of the year. The blank 2026 version on this page uses the same 25 lines with the 2026 thresholds already filled in on lines 6 and 13; use Print or save as PDF to get a one-page copy.
SOURCES
Where these figures come from
The 2026 rate bands, ordinary rate schedules and standard deduction amounts are from IRS Revenue Procedure 2025-32 (§3.01 tax rate tables, §3.03 maximum capital gains rate, §3.14 standard deduction). The line order and the wording of each step follow the Form 1040 instructions.
Disclaimer: a planning tool, not tax advice or a substitute for filing software. It does not handle 28% rate gain, unrecaptured section 1250 gain, the alternative minimum tax, or the net investment income tax. If Schedule D shows either of the first two, use the Schedule D Tax Worksheet.
