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Canadian Dividends No Tax
- Until the Alternative Minimum Tax (AMT) kicks in
Income Tax Act s. 127.5
Our Canadian tax calculator calculates alternative minimum tax as it relates to Canadian dividends.
In this article, we talk about what can be earned in Canadian eligible or non-eligible dividends before regular federal or provincial taxes are payable, and before alternative minimum tax applies, if there is no income other than the eligible or non-eligible dividends. The results shown are for a single person.
In the following table:
The 2021/2022 amounts are based on rates known as of September 18, 2022, including 2022 indexation for Alberta.
(1) ON excludes Ontario Health Premium.
(2) QC excludes contribution to the health services fund, health contribution, and prescription drug insurance plan premiums.
(3) Refundable tax credits are excluded.
(4) Provincial AMT is calculated as a % of federal AMT, except for Quebec. Thus, even though the eligible dividends may not reach the taxable level in a particular province, they will still be subject to AMT if there is federal AMT. The BC, NL and ON AMT rates are calculated as lowest provincial tax rate / lowest federal tax rate. Quebec's AMT is not based on the federal AMT, and Canadian dividends, eligible or non-eligible (small business) do not incur provincial AMT in Quebec.
See our tables of dividend tax credit rates for eligible dividends by year from 2007 to present for every province & territory, for dividend tax credit rates for each province and territory.
The above table only relates to AMT regarding eligible Canadian dividends. AMT may be applicable in other situations when taxpayers have high incomes, yet have little tax payable on the income. The exemption level for federal AMT is $40,000.
For more information on alternative minimum tax, see the Canada Revenue Agency information on Minimum Tax web page. The AMT is calculated on form T691.
Non-Eligible Dividends (Regular Dividends)
In the following table:
The 2021/2022 amounts are based on rates known as of September 18, 2022. The 2021 amounts for PE and SK have been revised, as their 2021 budgets revised their non-eligible dividend tax credit rates.
(1) BC excludes Medical Services Plan Premiums, which were eliminated for 2020 and later years. Refundable tax credits are excluded.
(2) ON excludes Ontario Health Premium.
(3) QC excludes contribution to the health services fund, health contribution, and prescription drug insurance plan premiums.
See our tables of rates for non-eligible (small business) dividends, which shows the dividend tax rates for 2007 to present for each province and territory.
See our article on non-eligible (small business) dividends for more information.
To see the tax results for your own income situation, and how it would change if the type of investment income changes, use our Income Tax Planning Calculators, in particular the Investment Income Tax Calculator.
For a comparison of taxes for all provinces and territories for 2021 and earlier years, including marginal tax rates for eligible and non-eligible dividends, capital gains and other income, see the Basic Canadian Tax Calculator.
Canada Revenue Agency (CRA) Resources
Form T691 Alternative Minimum Tax
Tax Tip: Everyone's situation differs. Seek the advice of a professional tax advisor if you think there is a possibility you may be subject to alternative minimum tax.
Revised: March 01, 2023
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