Yes they are income taxed but dont pay social security or medicare taxes. If you earn $100 wages you pay 6.2 percent SS taxes and 1.45% medicare (employer pays

Yes they are income taxed but dont pay social security or medicare taxes. If you earn $100 wages you pay 6.2 percent SS taxes and 1.45% medicare (employer pays more than this too). If you earn $100 dividends you dont pay either.