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Manitoba Dividend Tax Credit

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Manitoba -> Dividend tax credit

Manitoba Dividend Tax Credit

Manitoba Tax Credit Rates for Eligible Dividends

Manitoba Income Tax Act s. 4.7(1)(b)(ii)

The dividend tax credit for dividends eligible for the enhanced dividend tax credit is 8% of the taxable dividend as of the 2012 tax year, as announced in the Manitoba 2012 Budget.  Prior to 2012, it was 11% of the taxable dividend amount.

The federal gross-up reductions, starting in 2010, automatically reduced the amount of the MB enhanced dividend tax credit as a percentage of the actual dividends, as follows:

MB Dividend Tax Credit Rate for Eligible Dividends
Year 2009 2010 2011 2012+
Gross-up % 45% 44% 41% 38%
enhanced dividend tax credit as a % of
taxable dividend 11% 11% 11% 8%
gross-up amount 35.44% 36.00% 37.83% 29.05%
actual dividends 15.95% 15.84% 15.51% 11.04%

For marginal tax rates and thresholds for the current and prior years, federally and for each province and territory, see the Manitoba Table of Marginal Tax Rates.  See also the Enhanced Dividend Tax Credit article.

Manitoba Tax Credit Rates for Non-Eligible Dividends

Manitoba Income Tax Act s. 4.7(1)(b)(i)

For non-eligible, or small business dividends, the Manitoba dividend tax credit is defined as a percentage of the taxable dividend.

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.

The Manitoba dividend tax credit rates correspond to the reduction in the Manitoba small business corporate tax rate to 4.5% for 2006, 3% for 2007, 2% for 2008, 1% for 2009 and 2010, and zero starting December 1, 2010.

The Manitoba government will have to make legislative amendments, because their Income Tax Act currently reads that the dividend tax credit rate is 0.83% in respect of a taxable dividend for which the federal dividend gross-up rate is 18%.  Bill 11, The Budget Implementation and Tax Statutes Amendment Act, 2016, includes a revision to the non-eligible dividend tax credit, revising it from 0.83% of the taxable dividend to "0.7835% of the total amount included in the individual's income for the year in respect of a taxable dividend for which the federal dividend gross-up rate is 17%".  The Bill states that this provision comes into effect January 1, 2016.

The Manitoba dividend tax credit rates for non-eligible dividends are reflected in the following table.

     MB Dividend Tax Credit Rate for Non-Eligible Dividends

Year Gross-up
Rate
%of Federal
Gross-up
% of Grossed-up
Dividend
% of Actual
Dividend
2017+ 17% 5.39% 0.7835% 0.92%
2016 17% 5.71% 0.7835% 0.92%
2014/2015 18% 5.44% 0.83% 0.98%
2011-2013 25% 8.75% 1.75% 2.19%
2009/2010 25% 12.50% 2.50% 3.13%
2008 25% 15.75% 3.15% 3.94%
2007 25% 18.35% 3.67% 4.59%
2006 25% 24.35% 4.87% 6.09%

Revised: September 19, 2017

 

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