Are there any tax implications for shareholders receiving this dividend in the current fiscal year? | TPB (Aug 06, 2025) | Candlesense
TPB

Are there any tax implications for shareholders receiving this dividend in the current fiscal year?

Tax implications for shareholders who receive the TP‑B dividend in the current fiscal year (2025)

Item What it means for the shareholder Typical U.S. tax treatment*
When the dividend is taxable The dividend is payable on October 10 2025 and will be received (or credited) in 2025. For tax purposes the dividend is treated as income in the calendar year 2025, the year in which the cash is actually received, not the year it was declared. The amount will be reported on the shareholder’s 2025 individual income‑tax return (Form 1040).
Nature of the income The $0.075 per share is a regular cash dividend – not a return of capital, not a stock‑split, not a capital‑gain distribution. Cash dividends are taxable as ordinary dividend income. Whether the dividend qualifies for the “qualified‑dividend” rates (the lower 0 %, 15 % or 20 % rates) depends on the holding‑period and the type of payer. If it does not meet the qualified‑dividend requirements, it is taxed at the shareholder’s ordinary marginal tax rate.
Form 1099‑DIV The broker or the company will issue a Form 1099‑DIV to each shareholder who receives $10 or more in total dividends during the year (the threshold is $10 for most U.S. investors). The form will be mailed out in early 2026 and will be used to prepare the 2025 tax return. The dividend amount is entered on Line 3b (Qualified dividends) or Line 3a (Ordinary dividends) of Form 1040, depending on its qualification status.
Qualified‑dividend test To be a qualified dividend the shareholder must:
1. Own the shares for more than 60 days during the 121‑day period that begins 60 days before the ex‑dividend date (the ex‑date is usually the day before the record date, i.e., September 18 2025).
2. The dividend must be paid by a U.S. corporation (Turning Point Brands is a U.S. corporation) and not be a “non‑qualified” dividend (e.g., certain REIT dividends, capital‑gain distributions, or dividends on preferred stock that are not ordinary).		 If both conditions are met, the $0.075 per share can be reported as a qualified dividend and taxed at the preferential rates (0 %, 15 % or 20 %). If the holding‑period is not met, the dividend is taxed at ordinary rates.
State and local taxes Most states levy a tax on dividend income that mirrors the federal treatment. Some states (e.g., New Hampshire, Tennessee) do not tax dividend income, while others tax it as ordinary income. Shareholders must include the dividend on their state income‑tax return in the same year (2025).
Backup withholding If the shareholder has not provided a valid Form W‑9 (or foreign equivalent) to the broker or the payer, the payer may be required to withhold 24 % of the dividend for federal income tax (backup withholding). The withheld amount is credited toward the shareholder’s 2025 tax liability and is reported on the 2025 Form 1040.
Foreign shareholders Non‑U.S. persons are subject to a 30 % withholding tax on U.S. cash dividends unless a tax treaty reduces the rate. The payer must report the dividend on Form 1042‑S (for foreign recipients). The foreign shareholder can claim a foreign‑tax credit on their home‑country return for the U.S. tax withheld, subject to treaty provisions.
Impact on basis and future capital gains Receiving a cash dividend does not affect the cost basis of the TP‑B shares. The basis remains the original purchase price (adjusted for any stock splits, return‑of‑capital distributions, etc.). When the shares are later sold, the capital‑gain calculation uses the unchanged basis; the dividend is taxed separately in the year it is received.

Bottom‑line for a typical U.S. individual investor

  1. Report the dividend on the 2025 tax return (Form 1040).
  2. Determine if it is a qualified dividend – hold the shares for >60 days around the ex‑date; if so, you’ll likely benefit from the lower qualified‑dividend tax rates.
  3. Expect a 1099‑DIV (if total dividends ≄ $10) and use it to complete the return.
  4. Check for backup withholding – if you did not provide a proper tax‑information form to your broker, 24 % may have already been withheld and will be credited on your return.
  5. Include any state tax on the dividend in your 2025 state return.

Even though the per‑share amount ($0.075) is modest, the full amount you receive (e.g., 10,000 shares → $750) is fully taxable in 2025. Proper record‑keeping of the dividend receipt, the ex‑date, and the holding period will ensure you can correctly classify the dividend and claim any applicable preferential tax rates.

* Disclaimer: The above is a general overview of U.S. federal and state dividend tax rules. Individual circumstances (e.g., high‑‑income thresholds, alternative minimum tax, specific state rules, or foreign‑person status) may alter the tax outcome. Consult a qualified tax professional for personalized advice.

Other Questions About This News

How does this dividend compare to Turning Point Brands' historical dividend payouts? How might this dividend affect TPB's earnings guidance and forecast revisions for the next quarters? How does TPB's dividend policy compare to its direct competitors in the consumer products sector? What impact will the dividend declaration have on TPB's share price around the ex‑dividend date? Is the dividend sustainable given TPB's cash flow and payout ratio? Will the dividend affect the pricing and implied volatility of TPB's listed options? What does the board’s decision to issue a regular quarterly dividend signal about the company’s financial health and future outlook? Will the dividend payout influence institutional versus retail demand for TPB shares? What is the current dividend yield after the $0.075 per share dividend is declared?