WILMINGTON, Del. (AP) -- InterDigital Inc. is issuing a special cash dividend and bumping up the timing of its regular quarterly dividend payment as the wireless technology company takes advantage of current low tax rates on dividend income.
The Wilmington, Del.-based company said it will pay a $1.50 special dividend on Dec. 28 to shareholders of record as of Dec. 17. The company announced that it will also pay its regular quarterly dividend of 10 cents on Dec. 28. In prior years, this quarterly dividend was paid in late January.
InterDigital said the special dividend comes at the end of a record year for the company, underscoring the company's approach to cash management and reflecting its confidence in its business. Last month, InterDigital issued stronger-than-expected guidance, saying it expects patent royalties and strong sales by licensees in Japan to boost fourth-quarter revenue.
It is the latest company to move up its quarterly payout or issue a special end-of-year payment to protect investors from potentially 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.
Shares of the company gained 69 cents to $43.90 in midday trading. Over the past year, InterDigital shares have traded between $22.37 and $46.75.