What are the holding period requirements associated with qualified dividends?
Generally, a security must be held more than 61 days of the 121-day holding period surrounding the security’s ex-dividend date to qualify for favorable tax treatment of the dividend. With distributions from mutual funds the holding period requirement applies on both the fund level and the shareholder level. This means that in order for a dividend to be qualified, the fund must have held the security for at least 61 days of the 121-day period. On your Form 1099-DIV, Putnam will provide you with the total of qualified dividends, based on the fund’s holding period; however, in order for the dividend to actually qualify, you must have also held the mutual fund shares for at least 61 days of the 121-day period. To calculate your holding period, count the number of days you held the shares starting with the day after the shares were purchased. If the shares were sold, count the number of days held, including the date sold.
