RE:RE:RE:An “Eligible Dividend for Canadian Income Tax purposes”
Luckyguy777 wrote: The difference in tax rate for an "eligible" vs "other than eligible" will depend on the tax bracket you are in and the province of residence. The highest eligible dividend rate is in Newfoundland @ about 45% and the lowest is Yukon at about 26%. SK is the lowest province at just under 30%, Ontario's top rate on eligible dividends is near 40%. Alberta's top rate is about 33%. So you can see it is all over the map.
The reduced rate has nothing to do with where the income is earned. It has more to do with the corporate tax rate paid by the company on the income it earned. Most public companies will only pay eligible dividends because they have paid the top corporate rate on the income earned. Then each province has a different treatment of the dividend tax credit that is available so that is why it is different in each province.
Thank you, solid info. I knew someone better would have the actual facts lol
It seems like it's something that we shouldn't really value all that much as small retail players as it's relation to us is likely quite small be it positive or negative to our personal tax situations. But likely notable for those that do their own taxes. I know I receive several different types of dividends from different places and I get like 4-6 tax sheets I let my tax people sort out, but it also seems like it's already sorted in the system from the CRA that the sheets I get are just for confirmation purposes.