Atlantic Provinces -> New Brunswick -> Dividend tax credit

New Brunswick dividend tax credit

Eligible dividends

NB Income Tax Act, 2000 s. 35(b)(ii)

Starting in 2009, the dividend tax credit for dividends eligible for the enhanced dividend tax credit is 87/225ths of the Federal gross-up amount, which at 45% gross-up is

The federal gross-up reductions, starting in 2010, would have automatically reduced the amount of the NB enhanced dividend tax credit, but the Income Tax Act also has the phrase "to yield a dividend tax credit rate of 12%.  The publishing of the NB428 income tax form confirms that the 87/225ths is being ignored, and the 12% is being used when the gross-up is reduced, resulting in the rates below:

It is probably that the 2011 budget will introduce legislation to reflect this change.

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.

Non-eligible dividends

NB Income Tax Act, 2000 s. 35(b)(i)

The New Brunswick dividend tax credit rate for non-eligible, or small business dividends (25% gross-up) is defined as 53/200ths of the 25% Federal gross-up for 2007 and later years.  This is:

Revised: February 24, 2011