What are Eligible and Non-Eligible Dividends?

By |2022-08-28T23:27:10+00:00August 29th, 2022|Accounting, Taxes|

When it comes to dividends, there are two main types: eligible and non-eligible. Eligible dividends are those that meet specific criteria in the Canadian Income Tax Act (ITA). To the contrary, non-eligible dividends do not meet those criteria. This can be confusing for business owners and investors. Let's take a closer look at what makes a dividend eligible or not. Eligible Dividends Eligible dividends are paid by a corporation to its shareholders from its "general rate income pool" (GRIP). To be considered part of the GRIP, earnings must come from business activities in Canada. Usually these dividends are paid by public [...]