NEW YORK (AP) -- KBW Inc. said Thursday that it will issue a special dividend of $2 per share before the end of the year.
The investment bank is one of is the latest company to move up its quarterly payout or issue a special end-of-year payment to protect investors from potentially having to pay higher taxes on dividend income starting in January.
Since 2003 investors have paid a maximum 15 percent on dividend income. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending. As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.
KBW said the special dividend is payable on Dec. 17 to shareholders of record as of Dec. 10.