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Email this7:49 pm
April 6, 2013
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"Eligible" is just the label for a kind of dividend paid to shareholders. The label doesn't mean the dividend is eligible for something. Like in quantum mechanics. Some quarks are up quarks and some are down quarks. Doesn't mean those quarks are facing up or facing down!
Whether it is eligible or other-than-eligible determines where the dividend is reported on T5 slips. Eligible dividends and their federal dividend tax credit are reported in Boxes 24, 25, and 26. Other-than-eligible dividends and their dividend tax credit are reported in Boxes 10, 11, and 12. Calculation of their taxable amount and federal dividend tax credit is different between the two kinds of dividends.
7:24 am
March 14, 2023
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RetirEd - Here is a description from Purpose CPA's website:
Eligible dividends are paid by corporations from income that has been taxed at the general corporate tax rate. These dividends are subject to a higher gross-up (38%) and come with a higher dividend tax credit, resulting in lower personal tax rates for shareholders.
Non-eligible dividends are paid from income taxed at the lower small business tax rate. These dividends have a lower gross-up (15%) and a lower dividend tax credit, meaning shareholders face higher personal tax rates compared to eligible dividends.
There's likely a lot more to it in the tax code, but from a small investor's perspective most of the public Canadian company shares you buy are going to provide eligible dividends. ETFs excluded. And I don't know how taxes work for CUs.
Now back to the thread topic . . . .
11:00 am
February 7, 2019
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As we return to the forever missing Joint GIC's subject, it's also notable that unlike the EQB HISA which are available as Joint accounts, the EQB Notice HISA's are not ...
| CGO |
11:03 am
April 6, 2013
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One isn't going to be able to do much about the kind of dividend unless one has control of the corporation and affects whether the corporation pays income tax at the regular corporate rate or at the small business rate.
Credit unions have special deductions that allow them to pay little or no corporate income taxes. Consequently, they have empty GRIP and LRIP pools and can't declare an eligible or other-than-eligible dividend.
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