Articles
Jay Goodis, Evan Crocker, "Alternative Minimum Tax and Eligible Dividends", Tax for the Owner-Manager, Vol. 12, No. 3 January, p. 5
Effects on dividend taxation of increase in AMT exemption (p. 6)
- In 2023, a Canadian individual taxpayer with income of $55,000 that consisted solely of eligible dividends would not be subject to federal tax, but would be subject to alternative minimum tax on eligible dividends in excess of $55,000 until the regular net federal tax payable exceeded the minimum amount.
- For 2024 and subsequently, the increase in the AMT exemption from $40,000 to $173,205 means that income consisting only of eligible dividends will not generate AMT at any income level.
- A further benefit of the increase in the AMT exemption is that a taxpayer in 2024 will be able to receive tax-free eligible dividends of up to $71,780 for federal purposes, which is an increase of $16,780 compared to 2023.
- Taking into account provincial income tax, there is also an increase in all the provinces (also from $55,000 to $71,780 in Ontario, Alberta, B.C. and Saskatchewan.)