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Eligible Dividend Tax Credit Rates and Amount of Dividends
that may be Received Without Incurring Tax in 2014
1
Notes
(1) This table assumes only “eligible dividend” income is earned and takes into account all
federal and provincial taxes, surtaxes, and alternative minimum taxes, but does not include
provincial premiums (see the table “Provincial Health Premiums“). The respective basic
personal and dividend tax credits and provincial tax reductions, where applicable, are also
included.
In general, “eligible dividends” are dividends paid to Canadian residents by public
companies, and by Canadian-controlled private corporations (CCPCs) out of income taxed
at the federal general corporate tax rate. CCPCs cannot pay eligible dividends from income
that has benefited from a special tax rate such as active business income eligible for the
federal small business deduction or investment income that is subject to refundable tax
treatment. Public companies and other non-CCPCs can generally pay eligible dividends
without restriction.
The gross-up rate for eligible dividends is 38%. The actual amount received is therefore
multiplied by 1.38 to determine the taxable amount of the dividend.
(2) The federal and provincial dividend tax credit (DTC) rates in the table’s first column apply
to the actual amount of the dividend received by an individual. The DTC rate can also be
expressed as a percentage of the taxable dividend, as indicated in the table’s second
column.
(3) Ontario’s DTC rate on eligible dividends increased to 10% (from 6.4%) of the taxable
amount of the dividend effective January 1, 2014.
(4) Newfoundland and Labrador’s DTC rate on eligible dividends decreased to 5.4% (from
11.0%) of the taxable amount of the dividend effective July 1, 2014.
Dividend Tax
Credit Rate
2
Amount of Dividend
Received Tax Free
Actual
Dividend
Taxable
Dividend
Actual
Dividend
Taxable
Dividend
Federal
20.73%
15.02%
$ 49,284
$ 68,012
British Columbia
13.80
10.00
49,284
68.012
Alberta
13.80
10.00
49,284
68,012
Saskatchewan
15.18
11.00
49,284
68,012
Manitoba
11.04
8.00
24,271
33,494
Ontario
3
13.80
10.00
49,284
68,012
Quebec
16.42
11.90
35,076
48,405
New Brunswick
16.56
12.00
49,284
68,012
Nova Scotia
12.21
8.85
30,508
42,101
Prince Edward Island
14.49
10.50
44,674
61,650
Newfoundland and
Labrador
4
Dividends received
before July 1, 2014
Dividends received
after June 30, 2014
15.18
7.45
11.00
5.40
49,284
49,284
68,012
68,012
© 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Current as of December 31, 2014