Qualified Dividend

A dividend taxed at the lower long-term capital gains rate instead of ordinary income rates.

A qualified dividend meets IRS holding-period and payer requirements, typically from a U.S. corporation, and is taxed at the same favorable rates as long-term capital gains rather than as ordinary income. Dividends that don't meet the requirements, called non-qualified or ordinary dividends, are taxed at the investor's regular income tax rate.

Because she'd held the stock well past the required period, her payout counted as a qualified dividend and was taxed at the lower rate.