Certain dividends can qualify as qualified dividends. The benefit of a dividend being qualified is that the dividend is taxed at the ordinary income tax rate of the taxpayer rather than the normal higher rate on dividends that are not qualified

-the dividend is taxed at a rate lower than the ordinary income tax rate of the taxpayer.

-the dividend is excluded from the taxpayers gross income.

-the taxpayer can exclude 0%, 50%, or 85% of the dividend from the taxpayers gross income depending upon the taxpayers adjusted gross income.