DANBURY, Conn. (AP) -- Ethan Allen is moving up the record and payment date of its quarterly dividend, a measure that many companies are undertaking as the White House and GOP congressional leaders square off over the fiscal cliff.
Simultaneous tax increases and government spending cuts are set to take effect Jan. 1 unless Congress and President Barack Obama reach a deal first.
Ethan Allen said Monday that its quarterly dividend of 9 cents per share will now be paid to shareholders of record on Dec. 6. The dividend will be paid on Dec. 20. The record and payment date were initially scheduled for January.
The Danbury, Conn. company also announced that it will pay a special cash dividend of 41 cents per share. The special dividend will be paid on the same date as the quarterly dividend to shareholders of record on Dec. 6.
Ethan Allen Interiors Inc. is the latest company to move up its quarterly payout and issue a special end-of-year payment to protect investors from potentially having to pay higher taxes on dividend income starting in January.
Many companies are reviewing their dividend policies now that it appears investors could soon pay higher taxes. 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.