Post-Conversion (After January 1, 2020)
2021 and onward - Dividend Reporting
Carlyle currently expects that all distributions made in tax year 2021 will be paid out of current earnings and profits (E&P) and will therefore be treated for tax purposes as Qualifying Dividends. For future distributions, to the extent that any portion is expected to be treated as return of capital, a Form 8937 will be posted to the IR.Carlyle.com website under “Dividend History”. If no Form 8937 is posted, the distributions are expected to be treated as Qualifying Dividends. The brokerage firm you use to hold your CG stock will provide annual tax documentation to you, including the tax treatment of the distributions made and details on shares sold during the respective tax year, if applicable. To the extent you are a non-US shareholder, withholding may also be completed on your behalf by your broker and reported to you. Please consult your tax advisor to discuss any questions you may have related to the tax reporting of your CG shares.
2020 Dividend Reporting
On August 13, 2021, Carlyle completed its analysis related to 2020 earnings and profits (E&P), which changed from the estimate provided on January 15, 2021. As noted on the Forms 8937 posted to the shareholder website in January, Carlyle’s distributions and the determination of the tax character were based on the most current estimates of E&P available at that time. According to Internal Revenue Code Sections 301(c) and 316(c), distributions are treated as a taxable dividend to the extent there is current and accumulated E&P. Distributions in excess of E&P are treated as nontaxable return of capital and are applied against and reduce the adjusted basis of the stock. As a result of final 2020 tax compliance, current E&P calculations are resulting in the following changes in tax reporting:
|2020 DISTRIBUTION TREATMENT||JANUARY 2021 ESTIMATE||AUGUST 2021 FINAL||VARIANCE|
|RETURN OF CAPITAL||42%||72%||30%|
As an example of the above, for each share of CG stock owned in 2020, a total distribution of $1 was made ($0.25 per quarter). In January, it was determined that 58% or $0.58 of that $1 was taxable as a qualified dividend for US tax purposes. Based on current results, the taxable qualified dividend has been reduced to 28% or $0.28 of the $1 of distribution paid per share.
It is our understanding that depending on the brokerage firm you use to hold your CG stock, you may or may not receive corrected 2020 Form 1099-DIV’s. If you are a non-US shareholder, depending on your tax situation, your broker may have withheld on your distribution and remitted withholding to the IRS based on prior estimated results. This income and withholding should have been reported to you on a Form 1042-S. Your broker will determine whether to issue amended 1042-S forms at this time. Please reach out to your broker directly regarding any questions you may have regarding your 2020 tax documentation or the timing for providing corrected forms. You should discuss the impact of this change on your 2020 tax reporting with your tax advisor.
Conversion and Pre-Conversion (January 1, 2020 and prior)
2019 and 2020 Schedule K-1s
For assistance related to the Tax Package Support website, or if you have questions about your Schedule K-1, please contact Carlyle's Tax Package Support Service using one of the following methods:
Phone: (855) 886-9762 (Within US)
Phone: (972) 248-5396 or (800) 854-9346 (Outside US)
Mail: The Carlyle Group Inc. (f/k/a The Carlyle Group L.P.)
Attn: Tax Package Support
PO Box 799060
Dallas, TX 75379-9060
Prior Year Schedule K-1s
To obtain a copy of your Schedule K-1 Tax Package for the 2018 tax year, please access Carlyle's Tax Package Support website or contact Carlyle's Tax Package Support Service at (855) 886-9762.