T2 what is line 460 means? I cannot comrehend it!

Answer

Thank you for using Intuit ProFile Community

Simply stated the RDTOH applies to private corporations such as a CCPC that distributes taxable dividends. Canada Revenue Agency(CRA) states "A dividend refund is currently available to a private corporation that pays taxable dividends in a taxation year. The amount of its dividend refund for the year is equal to the lesser of 38 1/3% of all taxable dividends it paid in the year and its refundable dividend tax on hand (RDTOH) balance at the end of the year.".

It is the balance of the refundable dividend tax on hand (RDTOH) at the end of the previous year that is entered on line 460 of the T2 jacket.

There is information available from the CRA at the link below:

https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2018-equality-growth-strong-middle-class/passive-investment-income/dividend-refund-rules.html

The link discusses the RDTOH in questions 1. and 2. The article also discusses changes to the rules.

Please note there are changes for corporations with a start of the tax year after December 31, 2018. ProFile has implemented these changes.

Hope this helps


Was this answer helpful? Yes No
Default user avatars original
Moderator

No answers have been posted

More Actions

People come to ProFile for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach: