Under the United States Internal Revenue Code, the type of income is defined by its character.
Rents and royalties, after certain deductions, depreciation or depletion allowances, and gambling winnings are also treated as ordinary income.
The general rule taxes dividends as ordinary income.
A change allowing use of the same tax rates as is used for long term capital gains rates for qualified dividends was made with the Jobs and Growth Tax Relief Reconciliation Act of 2003.
This rule applies under the condition that the corporation has included the dividends in its own taxable income.