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Actual amount of eligible dividends
April 15, 2022
3:22 am
HermanH
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Box 24 on my T5 and Box 49 of my T3 is named, "Actual amount of eligible dividends"

Can anyone tell me where I report this box? I am already reporting the corresponding amounts from boxes 25 and 50, respectively.

Many thanks for any assistance.

April 15, 2022
5:12 am
Norman1
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The "Actual amount of dividends" boxes are not reported on the T1 General return. They are informational so that one can check the actual amount of dividends received from dividend cheques received or dividends credited to one's brokerage account.

Those explain why one can never find, for example, that $13,800 of taxable eligible dividends in any of one's accounts. Instead, one can only find $10,000.

It is the grossed up dividends (the taxable amount of dividends) that are reported on the Federal Worksheet section for Lines 12000 and 12010.

April 15, 2022
8:08 am
COIN
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Apparently, the dividend tax credit offsets the grossed-up amount. The CRA call it "integration" because the dividend is paid from a corporation's after-tax income.

April 15, 2022
8:16 am
AltaRed
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COIN said
Apparently, the dividend tax credit offsets the grossed-up amount. The CRA call it "integration" because the dividend is paid from a corporation's after-tax income.  

It does and is fair to the shareholder to avoid double taxation. That all said, it seems to me the new 'excess profits' tax being imposed on banks by the slime in Ottawa will not be incorporated (accommodated) in the dividend tax credit going forward. The dividend gross up is a generic approach to corporate taxation and does not reflect the actual 'effective' corporate tax rate of each corporation. Ottawa collects more from profitable banks and shareholders are left holding the bag through slower dividend growth rates (unless the banks find ways to offset the new tax with improved profit centers).

April 15, 2022
8:29 am
Bill
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Don't forget to claim the dividend tax credit on line 40425 of your return.

April 15, 2022
8:57 am
HermanH
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Thanks for all the help.

April 15, 2022
10:17 am
COIN
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Bill said
Don't forget to claim the dividend tax credit on line 40425 of your return.  

Apparently, the CRA does not automatically do it for you. Same with the foreign tax credit.

April 15, 2022
11:08 am
Bill
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AltaRed, please, it's not "excess profits" tax, it's the Canada Recovery Dividend. And it's just a one-time hit, for 2022, to help pay for the virus-related deficits.

It's to be paid over the next 5 years, and as you note appears not to be integrated with dividends paid to shareholders as are banks' income taxes. It's kind of like the HST in that regard, i.e. just another tax cost for the banks. And my impression is most Canadians are on board with the growing move to transfer wealth from those who have (what we deem is) too much of it to those who don't, so in that sense the gov't is just doing what our society wants.

The income tax rate for big banks, etc was also raised permanently by 1.5%, not sure what effect, if any, that'll have on the dividend tax credit - ?

April 15, 2022
11:26 am
AltaRed
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I doubt the Feds will change the gross up just because of a few big banks in the broader scope of large corporations. The DTC is a blanket formula that has not to my knowledge differentiated across industry sectors nor individual corporations. https://taxpage.com/articles-and-tips/dividend-gross-up/ is a pretty good summary for those that want to dig deeper.

FWIW, our society is generally pretty dumb about these things and the politicians know it. They forget these additional taxes (while they look like 'getting even' on the surface) are headwinds to growth on their own investment portfolios whether it be a simple mutual fund account from the nice lady at the bank, a RESP, TFSA, RRSP or a DC Pension Plan. Almost all Canadians will own a product that contains the bank stocks and thus pretty much everyone in the middle class is impacted, if ever so slightly.

April 15, 2022
11:44 am
Bill
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True, DTC is not industry specific, maybe dedicated blue chip dividend seekers might move some money into non-financials, may help those yields and/or valuations.

Agree about dumb. And savvy political leaders know people can be led to support things that are contradictory, e.g. blockading the proposed pipeline in the morning because we shouldn't be driving gas vehicles then going off in the afternoon to stop the proposed mine site for rare metals needed for electric cars!

April 15, 2022
12:09 pm
savemoresaveoften
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Bill said
AltaRed, please, it's not "excess profits" tax, it's the Canada Recovery Dividend. And it's just a one-time hit, for 2022, to help pay for the virus-related deficits.

It's to be paid over the next 5 years, and as you note appears not to be integrated with dividends paid to shareholders as are banks' income taxes. It's kind of like the HST in that regard, i.e. just another tax cost for the banks. And my impression is most Canadians are on board with the growing move to transfer wealth from those who have (what we deem is) too much of it to those who don't, so in that sense the gov't is just doing what our society wants.

The income tax rate for big banks, etc was also raised permanently by 1.5%, not sure what effect, if any, that'll have on the dividend tax credit - ?  

It is a simple yet the most unfair way to "pay for the covid cost". Simple as in target the sector that the votes "hate", but total unfair if one is without bias. When they target the banks, they are unfairly targeting the investors, those that risk their money to make a return....
Society will always agree to transfer the wealth from the rich to the poor, even tho they have done absolutely nothing to earn it.

April 15, 2022
12:43 pm
Bill
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The amount these measures will raise do not even come close to covering the billions spent during virus time but as you note that's not really the point, it's really just another powerful act of symbolism designed to stir emotions that translate to votes.

April 15, 2022
1:08 pm
COIN
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Banks and insurance companies are easy targets for "excess" taxation. I'm surprised the large grocery chains and landlords weren't also targeted.

Anyway, maybe we're getting a bit offtrack in this forum.

April 16, 2022
3:21 am
RetirEd
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Still veering off target, but relevant to the "double taxation" concept... remember that almost everything a corporation does in tax-deductible, whereas individuals can't deduct anything that is for personal consumption. That's why the additional tax remaining on dividends paid to individuals in justifiable; those dividends got a break at the corporate level!

That's what that taxpage article explains in detail about "integration."

Roughly half of Canadians are in debt and get nothing from corporate earnings; their only investments are government pensions. They pay and pay interest into those corporate earnings and government taxes. Yes, it's poor choices - but because of financial illiteracy. Why don't we teach simple personal financial management to our citizens to avoid waste of time and effort? Why do we keep increasing access to gambling, a purely destructive parasite on our society?*

savemoresaveoften:

Society will always agree to transfer the wealth from the rich to the poor, even tho they have done absolutely nothing to earn it.

The entire economy is set up to transfer wealth from the poor to the wealthy. Moat of those working do ALL the work to support the constant trickle-up of wealth to those amassing the money. The idle poor and idle rich are relatively small slices of the population, and the idle poor do worst of all.

Why have the lessons of the early 20th century been abandoned, the competition laws gutted and unenforced, increasingly since the Reagan era?

RetirEd

*The usual answer is "people will do it anyway," but there are many ways to fight this. For a start, block gambling advertising and internet gambling, and run anti-gambling campaigns. I envision stark banners of "GAMBLING IS FOR LOSERS."

April 16, 2022
5:44 am
Bill
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Lots here, just want to say I disagree "financial illiteracy" has anything to do with it, e.g. just look at siblings, some are parsimonious, others profligate, people are just different that way, always have been. No-one taught me a thing about money and I manage just fine, pretty sure I'm not the only one. The real key to teach is stop blaming others for your own actions, then life can get good.

Not sure if "competition laws gutted" but if so maybe because the main "competition" is now with the rest of the world, billions of people willing to work harder for far less pay than 1st worlders. Check out the labelling on everything we buy, comes from all over - heck, people even go on a week vacation half-way around the world now to spend their money elsewhere, no-one bats an eye.

April 16, 2022
6:03 am
savemoresaveoften
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Bill said
The real key to teach is stop blaming others for your own actions, then life can get good.

This says it all, exactly my observation too. By taking ownership of ones both good and bad decisions and not blame fate, others, etc, one is on the road to success.
As for dividends from banks and insurance companies, they will just find ways to absorb this covid tax put on them. Its enuf to put a pause in the appreciation of their stock prices for now probably, having had a great run off the back of the rate hike.

April 17, 2022
2:08 pm
Norman1
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RetirEd said
Still veering off target, but relevant to the "double taxation" concept... remember that almost everything a corporation does in tax-deductible, whereas individuals can't deduct anything that is for personal consumption. That's why the additional tax remaining on dividends paid to individuals in justifiable; those dividends got a break at the corporate level!

That's what that taxpage article explains in detail about "integration."

You've misunderstood that article, what antitrust laws are, and what gambling entertainment is.

A person can deduct all the business expenses a corporation can.

The dividend tax credit system is there so that a person receiving a dividend just pays the difference between what their personal taxes would have been on the corporate profits and the taxes the corporation has already paid on those profits.

I used to bet on horses. It was entertaining and exciting to see the horses one has bets on finish at the top. But, I knew that the track takes around 40% off the top of the betting pool. So, realistically, my long-term rate of return was around -40%.

Those who gamble are not losers. The losers are those who gamble and think they will get ahead in life financially as a result.

Antitrust laws prevent anticompetitive behaviour. They don't create competition. It has never been illegal to wipe out competitors by running a more efficient operation and outcompeting them. It is also not illegal to just meet one's competitors prices and refuse to beat them.

There's no conspiracy to transfer wealth from the poor to the wealthy. But, the world is set up to reward the astute and penalize the stupid.

It's not RBC Royal Bank's fault, for example, if the bank charges $11.95/month for an unlimited chequing account and people pay it, in spite of the fact that competitors offer similar accounts for as little as free!

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