MINNEAPOLIS (AP) -- Medtronic Inc. said Thursday that it will pay its quarterly dividend early, in an apparent attempt to help shareholders avoid potentially higher taxes.
The company's dividend of 26 cents per share is payable on Dec. 28 to shareholders of record as of Dec. 17. The dividend replaces the payment it would have declared in January.
Medtronic 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.
Based on the company's 1.02 billion shares outstanding, the dividends will cost Medtronic roughly $265.2 million
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.
Medtronic is a Minneapolis-based medical technology company. Shares gained 47 cents to close at $42.50.