EVANSVILLE, Ind. (AP) -- Shoe Carnival Inc. said Friday that its board approved the payment of a special cash dividend of $1 per share and a quarterly cash dividend of 5 cents.
The Evansville, Ind.-based footwear and accessories company said the dividends will be paid on Dec. 28 to shareholders of record as of Dec. 17.
Shoe Carnival 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.
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.
Shoe Carnival shares rose 10 cents to $22 in morning trading Friday. They peaked at $24.66 on Aug. 23 over the past year. They fell as low as $14.97 last December.
The company operates 352 stores in 32 states and Puerto Rico,