Saskatchewan Increases Dividend Tax Credit

According to an official news release, Saskatchewan intends to increase the dividend gross up and tax credit quite substantially.

The Government also introduced changes to the dividend tax credit (DTC). Effective for the 2006 taxation year, Saskatchewan will establish a new DTC on dividends received from larger corporations at a rate of 11 per cent. By increasing its DTC rate for larger businesses, Saskatchewan has now integrated with the changes announced in the May federal budget. Effective for the 2007 taxation year, the DTC rate on dividends received from small businesses will drop from 8 per cent to 6 per cent to reflect Saskatchewan’s lower small business corporate income tax rate.

I’ll keep an eye on the E&Y Tax Calculator and post again when they have accounted for this change. 

Hat-tip to Financial Webring Forum for bringing this to my attention. 

Update, 2006-11-18: Boy, that was fast!

Investors Taxable Income Marginal Rate on Interest Marginal Rate on Dividends Equivalency Factor
Widows & Orphans $30,000 26.25% 0.00% 1.36
Professionals $75,000 39.00% 13.10% 1.42
Plutocrats $150,000 44.00% 20.35% 1.42

Leave a Reply

You must be logged in to post a comment.