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Dividend Tax Credit

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Personal Tax -> Dividend tax credit

Dividend Tax Credits for Canadian Dividends

The dividend tax credit is a non-refundable tax credit which applies when Canadian dividends are included in income.  Foreign dividends do not qualify for the dividend tax credit.

Both dividend tax credits are claimed on Line 425 on Schedule 1 of the federal personal income tax return.

The dividend tax credit for dividends received after 2005 depends on the type of corporation paying the dividend.  Most dividends received from Canadian public corporations are eligible for the enhanced dividend tax credit (eligible dividends), while most dividends received from Canadian-controlled private corporations (CCPCs) are eligible for the regular, or small business dividend tax credit.  The two types of Canadian dividends are usually referred to as "eligible" or "non-eligible" dividends.

Enhanced Dividend Tax Credit for Canadian Eligible Dividends

Enhanced dividend tax credit for Canadian eligible dividends - the basics, rates changed 2010 to 2012.

Table of Federal & Provincial/Territorial enhanced dividend tax credit rates

Why is there sometimes a negative marginal tax rate for dividends for lower income tax brackets?

Government benefits could be reduced by treatment of dividends after 2005.

Dividend Tax Credit for Non-Eligible, or Small Business Dividends

Dividend tax credit for non-eligible Canadian dividends - gross-up changed in 2014, changing again from 2016 to 2019.

Topics Related to Dividends

Comparison of taxes payable in each province on different levels of eligible dividends, non-eligible dividends, and interest income.

Comparison of taxes payable for seniors on Canadian eligible dividend income versus other income.

Alternative minimum tax as it relates to Canadian dividends, and how much can be earned in dividends before regular income taxes are payable.

Transfer dividend income to a spouse - In some circumstances, Canadian dividend income may be included in the income of either spouse.

Dividend tax credit rates for 2004 & 2005

 

Revised: August 18, 2015

 

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