Susquehanna Bancshares, Inc. is paying its quarterly dividend early while tax rates on dividend income are still low.
The Lilitz-based bank announced Wednesday a dividend of 7 cents is payable Dec. 31 to shareholders of record as of Dec. 21.
William Reuter, company chairman and CEO, said the bank is releasing the payment sooner to avoid potential tax increases created by a fall over the fiscal cliff.
For the past nine years, investors have paid no more than a 15 percent tax rate on dividend income. That historically low rate is set to expire Jan. 2 unless federal lawmakers reach a compromise on tax increases and spending cuts.
Without intervention, taxes on dividend income will be levied based on which income bracket a taxpayer is in. For example, the highest earners would pay 43.4 percent on dividends.
Susquehanna Bancshares is one of several companies to recently announce an early dividend payout. Others include Bon-Ton, American Eagle, Best Buy, Coach, Costco Wholesale Corp., DSW, Family Dollar and Wal-Mart Stores.