A corporation's dividend refund for the year on eligible dividends will be the lesser of the balance in the Non-Eligible RDTOH account at the beginning of the year and 38-1/3 percent of the eligible dividends paid for the year.

Question

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The dividend refund for a corporation on eligible dividends is related to the balance in its General Rate Income Pool (GRIP) and not the Non-Eligible Refundable Dividend Tax On Hand (RDTOH) account. The Non-Eligible RDTOH account is relevant for non-eligible dividends. The refund rate for eligible dividends is not directly tied to a percentage of the dividends paid.

A Corporation's Dividend Refund for the Year on Eligible Dividends