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BC Dividend Tax Credit

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British Columbia -> Dividend tax credit

BC Dividend Tax Credit

BC Income Tax Act s. 4.69

BC and other provinces provide a personal non-refundable dividend tax credit for income from Canadian dividends.  BC's Income Tax Act specifies the dividend tax credits for both eligible and non-eligible dividends as a percentage of the federal gross-up amounts.

BC Enhanced Dividend Tax Credit for Eligible Dividends

The BC 2012 Budget increased the enhanced dividend tax credit from 9.76% of the taxable dividend to 10%, which is equivalent to 13.8% of the actual dividend.  The tables of marginal tax rates show the marginal tax rates for eligible and non-eligible dividends and other income.

The dividend tax credit for dividends eligible for the enhanced dividend tax credit was, up to and including the 2011 tax year:

bullet35 4/9% of the gross-up, which at 45% gross-up is
bullet11% of grossed-up dividends
bullet15.95% of actual dividends

The federal gross-up reductions, which started in 2010, automatically reduced the amount of the BC enhanced dividend tax credit as follows:

Year 2009 2010 2011 2012(1) 2012+(2)
Gross-up % 45% 44% 41% 38% 38%
enhanced dividend tax credit as a % of
grossed-up dividends 11% 10.83% 10.31% 9.76% 10.0%
actual dividends 15.95% 15.60% 14.53% 13.47% 13.8%

(1)  Before being revised by BC 2012 Budget.
(2)  As revised by BC 2012 Budget.  This rate is still in effect.

The Federal 2008 Budget reduced the gross-up rate and the dividend tax credit rate for dividends eligible for the enhanced dividend tax credit.  See the Enhanced Dividend Tax Credit article for details.

For marginal tax rates and thresholds for each year up to the current year, federally and for each province and territory, see the Tables of Marginal Tax Rates.

See our Tables of Enhanced Dividend Tax Credit Rates for rates for all provinces and territories.

BC Ministry of Finance resources:  Dividend Tax Credit

BC Dividend Tax Credit for Non-Eligible Dividends

The Federal 2016 Budget announced that the gross-up rate for non-eligible dividends (also know as regular dividends, or small business dividends) would be not be revised further after 2016, and the Federal tax credit rate for these dividends would remain at 2016 rates.  See the article on the non-eligible dividend tax credit for more information.  BC did not subsequently make any changes to the non-eligible dividend tax credit rate.

The BC 2017 Budget reduces the dividend tax credit rate for non-eligible dividends from 17% of the gross-up to 15% of the gross-up, effective for the 2017 taxation year.  This is due to the reduction of the small business corporate income tax rate from 2.5% to 2% effective April 1, 2017.

The rates for non-eligible, or small business dividends are reflected in the following table.

     BC Dividend Tax Credit Rate for Non-Eligible Dividends

Year Gross-up
%of Federal
% of Grossed-up
% of Actual
2017+ 17% 15% 2.18% 2.55%
2016 17% 17% 2.47% 2.89%
2014/2015 18% 17% 2.59% 3.06%
2010-2013 25% 17% 3.40% 4.25%
2009 25% 21% 4.20% 5.25%
2008 25% 25.5% 5.10% 6.375%

For current tax brackets and thresholds see BC Personal Marginal Income Tax Rates.

See our tables of non-eligible dividend tax credit rates for all provinces and territories.

See also BC Ministry of Finance Dividend Tax Credit information.

Revised: February 21, 2017



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