There seems to be some inconsistency in the usage of the term "ordinary dividends". (I'm considering the United States tax system.)
Most online sites seem to define the terms "ordinary dividend" and "qualified dividend" as mutually exclusive, with ordinary dividends being taxed at ordinary income tax rates and qualified dividends being taxed at the long-term capital gains tax rate. For example, the site linked above says that the terms "ordinary dividend" and "non-qualified dividend" are synonymous.
But U.S. tax forms seem to treat both qualified dividends and non-qualified dividends as a subset of "ordinary dividends". For example, I believe that on the Form 1040 (for tax year 2021), in box 3b for "ordinary dividends", you are supposed to include the value of the "qualified dividends" listed in box 3a. Similarly, my form 1099-DIV provided by my financial institution describes line 1a as "Total ordinary dividends (includes lines 1b, 5, 2e)", where line 1b is "Qualified dividends".
My two questions:
- Am I correct that the usage of the term "ordinary dividends" is simply inconsistent, and some people use that term to include qualified dividends and others don't?
- If so, then under the usage where the term "ordinary dividends" does include qualified dividends, what's considered to be a "non-ordinary" dividend?