A qualified dividend is a dividend that falls under capital gains tax rates that are lower than the income tax rates on unqualified, or ordinary dividends.
The requirements for a dividend to be considered qualified are stocks that pay the dividends must be held for at least 60 days within a 121–day period that begins 60 days before the ex–dividend date, which the holder is not entitled to the next dividend payment. According to IRS rules.
Non–qualified dividend which is sometimes called (ordinary dividends) is one that doesn't meet the IRS's requirements to qualify for a lower tax rate.
Most dividends paid by U.S. corporations quality for a lower tax rate however, one of the qualifiers is the minimum holding period. If an investor doesn't meet that requirement, the first payment won't qualify for the lower tax rate.
The tax rate on non–qualified dividend can be as high as 37% which is well above the 20% cap on qualified payment.