Ontario dividend tax credit

Overview

Individual investors pay personal income tax on dividends, which are paid from corporate earnings that have already been taxed. To avoid this double taxation, federal and provincial dividend tax credits are intended to compensate individual shareholders for income tax paid by Canadian companies in which they have invested.

Eligible dividends

Dividends received from Canadian public corporations and other corporations resident in Canada that are subject to the general corporate tax rate may be eligible for the Ontario dividend tax credit at the Rate for Eligible Dividends (see the table below). These amounts are usually reported in boxes 24, 25 and 26 on your T5 slip.

Other Canadian dividends received from Canadian-controlled private corporations subject to the small business tax rate may be eligible for the Ontario dividend tax credit at the Rate for Other Canadian Dividends (see the table below). These types of dividends are usually reported in boxes 10, 11 and 12 of your T5 slip.

Ontario dividend tax credit rates

The tax credit rates have changed over time; see the table below.

Receiving the credit

You need to claim the credit on your personal Income Tax and Benefit Return. To do this, you will first need to calculate your credit on line 61520 of the provincial worksheet to determine the amount to enter on form ON428.

• Download the Ontario provincial worksheet
• Download form ON428, Ontario Tax
• Get your General Income Tax and Benefit package from the Canada Revenue Agency
• Canada Revenue Agency — federal dividend tax credit
• Canada Revenue Agency — taxable amount of dividends (eligible and other than eligible) from taxable Canadian corporations