Atlantic Provinces -> Prince Edward Island -> Dividend Tax Credit
Prince Edward Island Income Tax Act s. 20
Prince Edward Island Dividend Tax Credit
Prince Edward Island's dividend tax credit rates are stated in their Income Tax Act as a percentage of the gross-up on the dividends.
The PEI government indicated in their 2006 budget that the dividend tax credit would be adjusted to preserve the integration between the corporate and personal income tax systems.
PEI Eligible Dividends
Eligible dividends currently have a gross-up of 38%. This means that 138% of the actual dividend amount is included in taxable income. See the Eligible Dividend Tax Credit article for details.
The PEI dividend tax credit on eligible dividends is set at a percentage of the gross-up amount. The current and prior rates for eligible dividends are shown in this table.
| PEI Dividend Tax Credit (DTC) for Eligible Dividends | ||||
| Year | Gross-up Rate |
%of
Federal Gross-up |
% of Grossed-up Taxable Dividend |
% of Actual Dividend |
| 2012 + | 38% | 38.13% | 10.50% | 14.489% |
| 2011 | 41% | 36.11% | 10.50% | 14.805% |
| 2010 | 44% | 34.36% | 10.50% | 15.118% |
| 2007 to 2009 | 45% | 33.8333% | 10.50% | 15.225% |
To see the marginal tax rate for eligible dividends, see the marginal tax rates page.
PEI Non-Eligible (Regular, or Small Business) Dividends
The PEI 2021 Budget announced a reduction in the small business tax rate from 2% to 1% effective January 1, 2022. Although not announced in the budget, the non-eligible dividend tax credit rate was reduced as a result, by Bill 37.
See the tables of non-eligible dividend tax credit rates by province.
The current and past rates for non-eligible, or small business dividends, are reflected in the following table.
| PEI Dividend Tax Credit (DTC) for Non-Eligible Dividends | ||||
| Year | Gross-up Rate |
%of
Federal Gross-up |
% of Grossed-up Taxable Dividend |
% of Actual Dividend |
| 2022 + | 15% | 10% | 1.30% | 1.495% |
| 2021 | 15% | 15% | 1.96% | 2.25% |
| 2019/2020 | 15% | 21% | 2.74% | 3.15% |
| 2018 | 16% | 21% | 2.90% | 3.36% |
| 2016/2017 | 17% | 21% | 3.05% | 3.57% |
| 2014/2015 | 18% | 21% | 3.2% | 3.780% |
| 2013 | 25% | 14.5% | 2.9% | 3.625% |
| 2011/2012 | 25% | 5.0% | 1.0% | 1.250% |
| 2010 | 25% | 10.5% | 2.1% | 2.625% |
| 2009 | 25% | 16.0% | 3.2% | 4.000% |
| 2008 | 25% | 21.5% | 4.3% | 5.375% |
| 2007 | 25% | 32.5% | 6.5% | 8.125% |
The PEI table of marginal tax rates shows the marginal tax rates for eligible and non-eligible dividends and other income.
The dividend tax credit rate is normally adjusted to reflect the changes in the small business corporate tax rate.
Revised: October 26, 2023