{"id":3805,"date":"2017-04-28T14:16:09","date_gmt":"2017-04-28T18:16:09","guid":{"rendered":"https:\/\/www.stevenslee.com\/sesesop\/?p=3805"},"modified":"2026-08-11T12:05:36","modified_gmt":"2026-08-11T16:05:36","slug":"when-are-esop-dividends-paid-on-shares-tax-deductible","status":"publish","type":"post","link":"https:\/\/www.stevenslee.com\/sesesop\/resources\/when-are-esop-dividends-paid-on-shares-tax-deductible\/","title":{"rendered":"When are ESOP dividends paid on shares tax-deductible?"},"content":{"rendered":"<p>A special tax-deduction is permitted for reasonable ESOP dividends on C corporation stock held in the ESOP if they are (i) used to repay an <a href=\"https:\/\/sesesop.com\/paycheck-protection-program-loans-forgiveness\/\">ESOP loan<\/a> the proceeds of which were used to acquire the employer securities with respect to which the dividends were paid, (ii) distributed in cash to participants no later than 90 days after the close of the plan year in which they were paid, or (iii) paid to the plan and reinvested in company stock. Distributed dividends are taxed as ordinary income.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A special tax-deduction is permitted for reasonable ESOP dividends on<span class=\"excerpt-hellip\"> [\u2026]<\/span><\/p>\n","protected":false},"author":46,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_exactmetrics_skip_tracking":false,"footnotes":""},"categories":[18],"tags":[],"class_list":["post-3805","post","type-post","status-publish","format-standard","hentry","category-resources"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Understanding When ESOP Dividends Are Paid - SES ESOP Strategies<\/title>\n<meta name=\"description\" content=\"Learn about Tax-Deductible ESOP dividends from our experienced ESOP advisors. We provide knowledge and support at every stage of the ESOP life cycle.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.stevenslee.com\/sesesop\/resources\/when-are-esop-dividends-paid-on-shares-tax-deductible\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Understanding When ESOP Dividends Are Paid - SES ESOP Strategies\" \/>\n<meta property=\"og:description\" content=\"Learn about Tax-Deductible ESOP dividends from our experienced ESOP advisors. 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