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Alberta -> Alberta dividend tax creditAlberta dividend tax creditAlberta Personal Income Tax Act s. 21Eligible dividendsAlberta's enhanced dividend tax credit for eligible dividends is stated as a portion of the Federal gross-up on the dividends. The Federal gross-up is being reduced each year until 2012. The Alberta portion of the gross-up is being increased each year, in order to keep the dividend tax credit at 10% of the taxable dividend. The amount included in taxable income is the actual dividend plus the gross-up.
The Federal 2008 Budget reduced the gross-up rate and the dividend tax credit rate for dividends eligible for the enhanced dividend tax credit. See the Enhanced Dividend Tax Credit article for details. The following table shows the effect on the combined federal/Alberta marginal tax rate for dividends eligible for the enhanced DTC, if no further changes are made to the Alberta Personal Income Tax Act. The table shows the rates known as at December 22, 2009.
The marginal tax rate for dividends is a % of the actual dividends received. The tax brackets above use the income thresholds for 2010. These thresholds are indexed each year. For marginal tax rates and thresholds for the current year, federally and for each province and territory, see the Tables of Marginal Tax Rates. To see the increase in the federal portion of the above rates, see the Enhanced Dividend Tax Credit article.
Non-eligible, or small business dividendsThese dividends are grossed-up by 25% to calculate the taxable amount of the dividend. The Alberta Personal Income Tax Act defines the dividend tax credit for these dividends as 7/40ths of the Federal gross-up. For 2009 and later years, the dividend tax credit rate for non-eligible dividends is
Revised: October 28, 2011
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