Non-eligible dividend
A non-eligible dividend is a taxable dividend from a Canadian corporation that has not been designated an eligible dividend. The CRA calls these dividends “other than eligible”, and they are reported separately on a personal return.
A non-eligible dividend is the counterpart of an eligible one. If a corporation does not designate a taxable dividend as eligible, it falls on this side. The CRA says dividends are usually reported on information slips such as the T5, and a buyer can ask for the company’s dividend history.
How it shows up
The CRA’s page on lines 12000 and 12010 says you may have received one or both of two types of dividends from taxable Canadian corporations: eligible and other than eligible. Line 12000 takes the taxable amount of both types, and line 12010 takes the taxable amount of dividends other than eligible. The same page points to a separate federal dividend tax credit, and to provincial and territorial tax and credits for individuals, so the personal result depends on the province.
What to ask
- How the company decided which dividends to designate as eligible
- What the shareholder’s T5 slips show for each year
- Whether the accountant has modelled the dividend mix against the shareholder’s province
Compare eligible dividends and read what a large pre-sale dividend does.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Canada Revenue AgencyGovernmentLines 12000 and 12010 – Taxable amount of dividends from taxable Canadian corporations
- 02Canada Revenue AgencyGovernmentEligible dividends
- 03Government of CanadaGovernmentIncome Tax Act, R.S.C. 1985, c. 1 (5th Supp.)
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