Dividend tax credit on Non Eligible Dividends:
Non-eligible dividends, also known as regular, ordinary, or small business dividends, are any dividends issued by a Canadian corporation, public or private, which are not eligible for the eligible dividend tax credit.
The non-eligible dividend tax credit rate is used for dividends received by individuals from Canadian-controlled private corporations (CCPCs), to the extent that their income is subject to tax at the small business rate. A portion of dividends from large public corporations may also be classified as being non-eligible dividends.
The amount included in taxable income for non-eligible dividends in 2019 and later years is 115% of the actual dividend. The additional 15% is referred to as the gross-up.
The dividend is included in the recipient's income when it is paid by the corporation, not when it is declared.
Federal & Provincial/Territorial Non-Eligible (Small Business) Business Dividend Tax Credit Rates