Qualified dividends are dividends received between 1/1/2003 and 12/31/2008 that meet the 60 day holding period requirements, and are paid by domestic C corporations and certain foreign corporations. To qualify, foreign corporations must either be (1) incorporated in the U.S. or a U.S. possession, (2) readily tradable on an established U.S. securities market or (3) eligible for benefits of a comprehensive income tax treaty with the U.S.  Qualified diviends for foreign entities do not include dividends paid in either the taxable year of the distribution, or the preceding taxable year were (1) a foreign investment company or (2) a passive foreign investment company or (3) a foreign personal holding company.

However, there are other IRS restrictions that define non-qualifying dividends:
* Dividends received in your IRA or retirement accounts.
* Distributions from S corporations.
* Most dividends from real estate investment trusts (REITs).
* Dividends from mutual funds to the extent attributable to interest and short-term capital gains.
* Dividends paid on money market accounts, policy dividends paid by insurance companies, and patronage dividends paid by cooperatives.
* Dividends that relate to payments that the shareholder is obligated to make with respect to short sales or positions in substantially similar or related property.
* Dividends recieved from tax-exempt corporations, mutual savings banks, and certain other savings institutions.
* Dividends recieved from preferred stock if the issuer treats the security as debt and deducts the payments as interest expense, such as with trust-preferred securities.