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Tax Comparison Seniors Investment Income 2014 - Dividends vs Interest

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Personal Tax -> Dividend tax credits -> 
                          Tax Rates -> Tax Comparisons ->  Tax comparison for seniors with investment income -> 2014

Seniors Tax Comparison: Canadian Dividends vs Other Investment Income 2014

The table on this page compares taxes payable by province in 2014 for two different types of income:

- Canadian dividends eligible for the enhanced dividend tax credit, and

- other income, such as interest and foreign dividends.

The calculations assume that the income is received by a single senior. The tax rates used are as known on August 19, 2014.

The total income in each case includes:

bullet$6,000 of Old Age Security
bullet$6,000 of Canada Pension Plan retirement income
bullet $24,000 of pension income eligible for the pension tax credit
bullet plus either
  1. $30,000 of Canadian dividends eligible for the enhanced dividend tax credit, or
  2. $30,000 of other income, which could be interest, foreign dividends, pension income, or other income with no special tax treatment, or
  3. $50,000 of Canadian eligible dividends, or
  4. $50,000 of other income

 
Income
Type
Total
Income
Taxable
Income

Total Federal + Provincial Income Taxes Payable in 2014

AB BC MB NB NL

NS

NT NU ON PE QC

SK

YT

A. Cdn Eligible Dividends $66,000 $76,529 $7,939 $7,453 $11,531 $9,682 $10,195 $11,746 $5,400 $6,254 $7,848 $10,787 $13,572 $8,933 $6,342
B. Other Income 66,000 66,000 13,761 13,539 15,852 15,883 14,998 16,449 11,811 10,525 13,569 16,169 18,300 14,910 13,281
Additional Tax (B-A) $5,822 $6,086 $4,321 $6,201 $4,803 $4,703 $6,411 $4,271 $5,721 $5,382 $4,728 $5,977 $6,939
C. Cdn Eligible Dividends 86,000 99,989 13,264 13,139 19,145 15,949 16,792 19,011 11,139 12,569 14,527 17,546 20,728 14,686 12,081
D. Other Income 86,000 83,839 22,027 21,577 25,332 25,039 23,779 25,845 20,038 18,304 22,093 25,571 27,496 23,654 21,590
Additional Tax (D-C) $8,763 $8,438 $6,187 $9,090 $6,987 $6,834 $8,899 $5,735 $7,566 $8,025 $6,768 $8,968 $9,509

Notes:
     - The clawback of OAS in Cases A ($871), C ($5,011) and D ($2,161) reduces taxable income, and is included as taxes payable.
     - BC includes MSP premiums payable for 2015 based on 2014 income.
     - NL dividends are assumed to be received evenly throughout the year, so the taxes are lower than they will be in 2015.
     - Ontario - includes Ontario Health Premium.
     - QC includes health contribution, contribution to the health services fund, and prescription drug insurance plan premiums.

Although the higher taxable income with Canadian eligible dividends causes a clawback of the OAS and a higher clawback of the age credit, the taxes payable are still significantly lower.

To see the tax results for your own income situation, and how it would change if the type of investment income changes, use our Income Tax Planning Calculators.

See also Tax Comparisons by Province and Territory, which compare different levels of employment income for people who are not seniors.

 

Revised: September 20, 2017

 

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