It depends on whether or not you have a GRIP Pool (General rate income pool) to draw down from. Eligible dividends are paid out of that pool (high-rate tax); Ineligible dividends are paid out on any retained earnings that were taxed at the small business rate (low-rate tax.)
A very generalized answer is that if your business has had net income of OVER $500,000 in any one year, you likely have a small GRIP pool, and can declare a small amount of eligible dividends. If you have never had a net income over $500,000 in any year, then you'll be drafting Box 10 ineligible dividends.
A very generalized answer is that if your business has had net income of OVER $500,000 in any one year, you likely have a small GRIP pool, and can declare a small amount of eligible dividends. If you have never had a net income over $500,000 in any year, then you'll be drafting Box 10 ineligible dividends.
birdfamily wrote: ↑I have a small business that is incorporated. I have withdrawn dividend from the company’s retain earnings. Should I complete T5 box 10, 11, 12 or box 24, 25, 26? I have done some reading but still can’t figure out the difference between eligible and non-eligible dividends. Any help is greatly appreciated, thanks.