Dividend Tax Credit

Dividend Tax Credit

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Dividend tax credits are claimed on Line 425 on Schedule 1 of the federal personal income tax return.  There are 2 types of Dividend Tax Credits.  
  1. Canadian Dividends is a non-refundable tax credit when included in income.
  2. Foreign Dividends do not qualify for the dividend tax credit.

Dividend tax credit for dividends received after 2005 depend on the type of corporation paying out the dividend.  There are 2 types of Canadian dividends - "eligible" and "non-eligible" dividends.  Most dividends received from public corporations in Canada are eligible for the enhanced dividend tax credit, while dividends received from controlled private corporations in Canada (CCPCs) are non-eligible.  The CCPCs are eligible for the regular or small business dividend tax credit.


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