An eligible dividend is any taxable dividend paid to a resident of Canada by a Canadian corporation that is designated by that corporation to be an eligible dividend. A corporation's capacity to pay eligible dividends depends mostly on its status.
For taxable dividends paid after March 28, 2012, a corporation is allowed to designate a portion of a taxable dividend (rather than the whole amount) to be an eligible dividend. Also, late designations are allowed, if they are made within three years after the day on which the designation was first required to be made and, in the opinion of the minister, it is just and equitable to do so in the circumstances, including to affected shareholders.
Forms and Publications
- Form T2002, Election, or Revocation of an Election, Not to Be a Canadian-Controlled Private Corporation
- Schedule 53, General Rate Income Pool (GRIP) Calculation
- Schedule 54, Low Rate Income Pool (LRIP) Calculation
- Schedule 55, Part III.1 Tax on Excessive Eligible Dividend Designations
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