Ads keep this website free for you.
TaxTips.ca does not research or endorse any product or service appearing in ads on this site.  Before making a major financial decision you  should consult a qualified professional.

Alternative Minimum Tax (AMT) TaxTips.ca
Canadian Tax and
Financial Information
TaxTips.ca Home

What's New

Links & Resources

Site Map

Need an accounting, tax or financial advisor? Look in our Directory.  Use above search box to easily find your topic!   Stay Connected with TaxTips.ca!

 

Home  ->  Personal Tax  ->  Dividend tax credits -> 

      -> Tax Rates   ->  Personal Income Tax Comparisons  ->  Alternative Minimum Tax (AMT)

Alternative Minimum Tax (AMT)

Income Tax Act s. 127.5

Alternative Minimum Tax and the Detailed Canadian Tax Calculator

2024 Alternative Minimum Tax Changes

2024 and Earlier Canadian Dividends No Tax

  - Eligible Dividends and Alternative Minimum Tax

  - Non-Eligible Dividends (Regular Dividends) and Alternative Minimum Tax

Canada Revenue Agency (CRA) Resources

Alternative Minimum Tax and the Detailed Canadian Tax Calculator

Our Canadian tax calculator calculates alternative minimum tax. However, since the calculator doesn't collect all the inputs needed for a more complicated minimum tax calculation, individuals who may be subject to AMT, or who do not have a simple tax situation, should be seeking advice from a tax lawyer or a CPA tax specialist.

Alternative Minimum Tax does not apply in the year of death - our Canadian tax calculator does not provide an option for this.

AMT is currently calculated on form T691 Alternative Minimum Tax.

2024 Alternative Minimum Tax Changes

As proposed by the Federal 2023 Budget, changes were made to the AMT calculation effective January 1, 2024.  A result of the changes to the AMT is that when Canadian dividends are the only income for a taxpayer, AMT does not apply at any level of dividends.  This is because the regular tax is more than the AMT at any level of dividends.

Effective for tax years beginning after 2023:

bulletAMT exemption raised from $40,000 to start of 4th tax bracket ($173,205 in 2024)
bulletAMT rate increased from 15% to 20.5%
bullet50% of deductions for CPP, child care and moving expenses are disallowed in the AMT calculation.
bullet 50% of most non-refundable tax credits are disallowed in the AMT calculation. Previously 100% could be claimed.
bullet the AMT capital gains inclusion rate is increased from 80% to 100%, with capital loss carry forwards and allowable business investment losses remaining at 50% rate
bullet 100% of the benefit associated with employee stock options is included in the AMT base.
bulletOnly 80% of the donation tax credit is allowed to reduce the AMT. Previously 100% could be claimed.
bulletinclude 30% of capital gains on donations of publicly listed securities in the AMT base. The 30% rate would also apply to the full benefit associated with the employee stock options to the extent that a deduction is available.

See also Alternative Minimum Tax (AMT) and Donation of Securities

For further information see the following:

Alternative Minimum Tax (AMT) for High-Income Individuals from Budget 2023

Budget 2024 Alternative Minimum Tax Changes for further changes in addition to the Budget 2023 changes.

Helpful Resources:

For a good summary of the new Alternative Minimum Tax with some examples, see Will you or your trust be affected by changes to the alternative minimum tax? from Grant Thornton LLP, updated June 21, 2024.

Charitable giving: How changes to AMT may impact your donations from Grant Thornton LLP, updated June 21, 2024.

Draft Legislation including Alternative Minimum Tax changes, and the related August 4, 2023 News Release.

Notice of Ways and Means Motion which includes changes to the AMT, and which became Bill C-69, Budget Implementation Act, 2024, No. 1 was tabled and past first reading, receiving Royal Assent on June 20, 2024. It includes the changes to AMT.

2024 and Earlier Canadian Dividends No Tax

Alternative Minimum Tax re 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.

Eligible Dividends and Alternative Minimum Tax (AMT)

As noted above, when Canadian dividends are the only income for a taxpayer, AMT is not incurred at any level of dividends.  This is because the regular tax is more than the AMT at any level of dividends.

In the following table:

bullet the federal row for eligible dividends shows the amount of actual dividends that can be earned before regular federal tax is payable for a single person with only the basic personal amount tax credit, if there is no income other than the dividends.
bulletthe provincial information shows the amount of actual dividends that can be earned in each province before any regular provincial income tax (net of any low income tax reduction) is payable.
bullet However, if this amount exceeds the amount of dividends at which federal AMT is payable ($54,403 in 2022), AMT will be payable for all provinces except Quebec, which does not base its AMT on the federal AMT. 
bulletthe provincial information also shows the total amount of regular federal income tax, plus federal and provincial AMT payable at the indicated amount of dividends.

The 2024 amounts are based on tax rates known as of August 29, 2024.

TaxTips.ca - Actual Eligible Dividends Before Regular Income Tax is Payable
 
2024 2023 2022
Province Prov AMT as
% of Fed AMT
Actual
Dividends
Fed Tax
(no AMT)
Actual
Dividends
Fed Tax +
AMT
Actual
Dividends
Fed Tax +
AMT
Federal $71,786 0 $68,558 $2,033 $65,061 $1,599
AB 35.00% 84,374 1,212 80,965 4,833 76,382 4,056
BC (3) 33.70% 195,537 22,111 186,226 20,986 175,684 19,865
MB 50.00% 39,988 0 35,677 0 26,954 0
NB 57.00% 158,106 13,876 151,011 15,270 127,419 11,875
NL 51.30% 28,432 0 27,279 0 25,758 0
NS 57.50% 32,411 0 32,408 0 32,408 0
NT (3) 45.00% 257,984 37,606 246,385 35,913 231,791 33,786
NU (3) 45.00% 93,018 2,522 88,848 6,278 83,570 5,345
ON (1) 24.63% | 33.67% 111,403 5,307 104,474 8,811 98,105 7,676
PE 57.50% 53,555 0 51,246 0 49,528 0
QC (2) n/a 50,795 0 48,353 0 41,370 0
SK 50.00% 123,351 7,118 117,806 10,733 110,835 9,522
YT (3) 42.70% 456,493 86,861 448,001 85,939 437,294 84,777
 
Federal AMT starts at n/a $55,002 $54,403

Notes:

(1)  ON excludes Ontario Health Premium. Ontario's 2024 Economic Outlook and Fiscal Review on October 30, 2024 announced a reduction of the Ontario additional tax for minimum tax purposes (AMT) from 33.67% to 24.63%, starting with the 2024 tax year. The 2024 results above reflect the original 33.67% rate.

(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.  However, Ontario has revised their formula to their lowest provincial tax rate / 20.5%, which is the % used in the revised Federal AMT calculation. Tables above have not yet been revised for the ON change. 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 Line 41700 - Minimum tax web page.  The AMT is calculated on Form T691.

Non-Eligible Dividends (Regular Dividends) and Alternative Minimum Tax

In the following table:

bullet the federal column for non-eligible dividends shows the amount of actual dividends that can be earned before regular federal tax is payable, if there is no income other than the dividends.
bulletthe provincial columns show the amount of actual dividends that can be earned in each province before any regular provincial income tax (net of any low income tax reduction) is payable.
bullet Alternative minimum tax (AMT) is not incurred at any level of these dividends.

The 2024 amounts are based on rates known as of August 29, 2024.

TaxTips.ca - Actual Non-Eligible Dividend Income Before Regular Income Taxes Are Payable
Year Gross
-up
Federal AB BC MB NB NL NS ON(1) PE QC(2) SK
2024 15% 34,321 24,341 26,772 15,255 23,861 22,888 38.445 36,798 17,217 20,779 21,160
2023 15% 32,784 23,358 25,482 14,587 22,788 21,974 16,582 36,798 16,366 18,181 19,212
2022 15% 31,461 22,035 24,045 10,437 21,430 20,750 16,582 34,541 14,862 18,181 17,323
2021 15% 30,172 21,541 23,552 10,259 19,578 20,471 16,582 33,733 15,298 18,670 16,827
2020 15% 28,907 21,541 23,300 10,175 19,391 20,392 16,582 33,440 16,081 19,807 20,552
2019 15% 26,373 21,541 22,726 9,994 19,026 20,205 16,582 38,244 15,125 21,078 20,552
2018 16% 30,737 20,801 22,340 9,701 18,652 19,676 16,702 37,105 15,197 22,264 20,293
2017 17% 33,313 20,456 22,082 9,525 18,972 18,740 14,673 43,566 14,548 24,016 19,996
2016 17% 32,855 22,792 22,712 9,410 19,495 18,634 14,673 42,863 14,365 22,065 19,517
2015 18% 36,160 22,377 22,718 9,968 19,910 18,705 14,791 43,807 13,558 21,641 19,188
2014 18% 35,551 21,848 21,628 9,968 23,014 18,333 21,666 42,946 12,825 21,410 18,866
2013 25% 43,432 21,653 25,059 9,998 21,910 19,281 28,339 40,141 11,657 22,390 19,160
2012 25% 42,584 21,276 27,711 9,805 21,875 18,807 28,339 39,425 9,140 21,850 18,789
2011 25% 41,420 20,900 27,062 9,603 21,417 18,241 28,339 38,164 9,140 21,284 21,324

(1)  ON excludes Ontario Health Premium.

(2)  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

Line 41700 - Minimum tax

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: June 26, 2025

 

Copyright © 2002 Boat Harbour Investments Ltd. All Rights Reserved.  See Reproduction of information from TaxTips.ca

Facebook  | Twitter  |  See What’s New, stay connected with TaxTips.ca by RSS or Email
The information on this site is not intended to be a substitute for professional advice.  Each person's situation differs, and a professional advisor can assist you in using the information on this web site to your best advantage. 
Please see our legal disclaimer regarding the use of information on our site, and our Privacy Policy regarding information that may be collected from visitors to our site.