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Nova Scotia Dividend Tax Credit

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Atlantic Provinces -> Nova Scotia

Nova Scotia Dividend Tax Credit

NS Eligible Dividends

NS Income Tax Act s. 21(b)

The dividend tax credit for dividends eligible for the enhanced dividend tax credit is 8.85% of grossed-up dividends.  This change was effected by Bill 27 Financial Measures (2011) Act, which was introduced in April 2011.

The resulting enhanced dividend tax credit rates for Nova Scotia are:

NS Enhanced Dividend Tax Credit

Year 2009 2010 2011 2012
& later
Gross-up % 45% 44% 41% 38%
enhanced dividend tax credit as a % of
grossed-up dividends 8.85% 8.85% 8.85% 8.85%
actual dividends 12.83% 12.74% 12.48% 12.21%

NS Non-Eligible Dividends

NS Income Tax Act s. 21(a)

The Nova Scotia dividend tax credit rate for non-eligible dividends (also know as regular dividends, or small business dividends) is defined as 22.94% of the federal gross-up, as revised by the NS 2015 budget.  For 2014 and earlier years, it was 38.5% of the federal gross-up.  The budget documents indicated that the dividend tax credit rate would be 3.5% of the taxable dividend, but the legislation revised the percentage of gross-up.

The Federal 2017 Fall Economic Statement announced that the gross-up rate for non-eligible dividends (also know as regular dividends, or small business dividends) would be reduced to 16% for 2018, and to 15% for 2019 and later years.

The current and past Nova Scotia rates for non-eligible dividends are shown in the following table.  The 2018 and later rates will be in effect unless legislative changes are made by Nova Scotia.

     NS Dividend Tax Credit Rate for Non-Eligible Dividends

Year Gross-up
Rate
%of Federal
Gross-up
% of Grossed-up
Dividend
% of Actual
Dividend
2019+ 15% 22.94% 2.99% 3.44%
2018 16% 22.94% 3.16% 3.67%
2016-2017 17% 22.94% 3.33% 3.90%
2015 18% 22.94% 3.5% 4.13%
2014 18% 38.5% 5.87% 6.93%
2013 25% 38.5% 7.7% 9.625%

The Nova Scotia table of marginal tax rates show the marginal tax rates for eligible and non-eligible dividends and other income.

 

Revised: December 12, 2017

 

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