Eligible dividend
Definition
A dividend paid from income taxed at the general corporate rate. Carries a higher gross-up and dividend tax credit than non-eligible dividends.
Long reference
Handbook
Eligible vs. Non-Eligible Dividends
Citations, procedures, and worked examples for eligible dividend.
Related terms
GRIP
General Rate Income Pool. Tracks income taxed at the general corporate rate in a CCPC. Eligible dividends can only be paid out of GRIP.
Capital Dividend Account
A notional account tracking the tax-free portion of capital gains realized by a CCPC. Balances can be distributed to Canadian-resident shareholders as tax-free capital dividends.