Windstream Corp. (NASDAQ:WIN) announced certain changes in the tax treatment of dividends to the stockholders, Telephone and Data Systems Inc (NYSE:TDS)
Windstream Corp. (NASDAQ:WIN) is a leader in providing advanced network communications which includes cloud computing and other managed services to businesses nationwide. The company also offers broadband, Digital TV and phone services to the consumers primarily in rural areas.
The company has recently announced that there have been certain changes in the tax treatment of dividends which have been paid to the stockholders in 2012, which have resulted in refunds from the income tax department.
Earlier in the year 2012, the dividends as declared and paid by the company were treated as 100% taxable but now, under the revised reporting 66.417% of the dividends paid will be treated as non-taxable. Due to such change in treatment of dividend income, the shareholders eligible to Refunds on the 66.417% of their dividend income as stated in their Income Tax returns for the year 2012.
The company has ensured the stockholders that the Revised IRS Forms 1099-DIV which reflects the revised tax reporting of the dividend will be mailed to them from July 15, 2013. The company also informed that the stockholders who trade through a bank or broker, they need to collect the revised form from such institutions.
The company has also posted Form 8937 (Report of Organizational Actions Affecting Basis of Securities) which will help the investors to identify certain activities that can affect their cost basis reporting of their investments.
The company expects to declare their dividend in the near future as taxable and non-taxable part of the dividend. The company expects that 50 to 60 percent of their dividend shall be treated as non-taxable dividend income to the stockholders.
Such change in the tax treatment of dividend have no financial impact on the company’s net income, free cash flow or other financial results as previously reported under Generally Accepted Accounting Principles (GAAP).
Telephone and Data Systems Inc (NYSE:TDS) is a telecommunication company engaged in providing wireless, broadband, TV and voice and other managed services to approximately 6.1 million customers nationwide.