Hello,
I am trying to get the dividend refund to apply on a T2 Corp tax return. Client has $1.2M in GRIP, paying out $92k dividend and for some reason the dividend refund is not reducing the tax liability. Any insight would be greatly appreciated. Thank you very much.
Cheers
Rob
Payment of dividends out of GRIP does not give rise to any refund (you should have balance in RDTOH – Rather the new names are ERDTOH and NRDTOH accounts). GRIP dividends are ‘eligible dividends’ giving a special tax break to the recipients.
Atul
Further to @atul, can you confirm the source of the GRIP balance? If it arose from dividend income, it could have created RDTOH in addition to the GRIP balance. But, if this is the first year using Tax Cycle for this particular client, you may have to confirm the RDTOH balance (from CRA) and enter it manually.
@nezzer is correct
If GRIP arose from dividends - ERDTOH would (could) have a balance… you need to confirm.
If GRIP arose from the general rate over SBD - no balance.
Part 4 considerations on intercompany dividends and GRIP arising as a result of stripping from prior years should also be a consideration.
Just go on CRA and see what the RDTOH is.
Simply put.