Ontario Dividend Tax Credit

The 2014 Ontario Budget tabled on July 14 included a number of proposed tax and benefit related changes. Learn more.

This credit reduces the personal income tax of Ontario investors because dividends from Canadian corporations are from earnings that have already been taxed at the corporate level.

What dividends are eligible for the tax credit?

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 tax credit. 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 lower rate. These types of dividends are usually reported in boxes 10, 11 and 12 of your T5 slip.

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

Ontario Dividend Tax Credit Rates
Taxation Year Rate for Eligible Dividends (%) Rate of Other Canadian Dividends (%)
2005 5.13 5.13
2006 6.5 5.13
2007 6.7 5.13
2008 7.0 5.13
2009 7.4 5.13
2010 6.4 4.5
2011 6.4 4.5
2012 6.4 4.5
2013 6.4 4.5
*2014 10.0 4.5

*Changes are subject to legislative approval.

How do I get 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 6152 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

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