T2 Schedule 3 Basic Question

T2
1

Hi,

What is the significance of this question on top of the Schedule 3 form while working on T2? While looking at the CRA form (pdf form on CRA website), Schedule 3 does not have this flag. What difference does it make if opted Yes or No? I see that Part 3 automatically calculates the Dividend Refund regardless. Is there any other internal flag/calculation/schedule triggers by selecting yes or no?

image

2

Part IV tax

3

Part IV tax on a T2 return (calculated on Schedule 3) is triggered when a private or subject corporation receives taxable dividends from other corporations. It applies to dividends deductible under section 112 or 113, ensuring tax integration by taxing portfolio dividends (38 1/3%) and certain connected dividends.