Enhanced Dividend Tax Credit

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• on October 3, 2016
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The gross-up and dividend tax credit are applicable to individuals, not corporations.
There is an enhanced dividend tax credit for eligible Canadian dividends received by individuals after 2005 from:

public corporations resident in Canada

other corporations resident in Canada that are not Canadian-controlled private corporations (CCPCs) and are subject to the general corporate tax rate

CCPCs resident in Canada to the extent that their income (other than investment income, which is eligible for a special refundable tax) is subject to tax at the general corporate tax rate
A portion of dividends paid by public corporations will sometimes be not eligible for the enhanced dividend tax credit.

With the enhanced dividend tax credit, a “gross-up” is added to the actual dividend to determine the taxable dividend amount for an individual to include in income.  The tax credit is calculated as a portion of the gross-up.  See the tables below for gross-up and Federal tax credit percentages.