income tax purposes, Enerplus' dividends are considered 'qualified dividends
For non-resident shareholders, these should be considered "qualified dividends
" and may be subject to Canadian withholding tax.
Most dividends, including dividends passed through from stock funds, are qualified dividends
that receive favorable tax treatment, although some conditions apply.
Similarly, the new kiddie tax rules modify the 0%/15%/20% breakpoints that would otherwise apply to a child's net long-term capital gains and/or qualified dividends
. These modifications are also computed as the sum of a child's ETI and specific 0%/15%/20% preferential rate breakpoints borrowed from estates and trusts.
For non-resident shareholders, the company's common share dividends should be considered 'qualified dividends
' and may be subject to Canadian withholding tax.
federal tax purposes, any dividends would be qualified dividends
eligible for the reduced capital gains rates.
One of the real benefits in the tax code is the treatment of qualified dividends
, which are tax-free up to a $50,600 income for an individual.
ATRA increased the top tax rates for long-term capital gains and qualified dividends
from 15 percent to 20 percent.
The maximum tax rate on qualified dividends
received by an individual, trust, or estate is 23.8% (base rate of 20% plus 3.8% net investment income tax for some high-income taxpayers).
The Jobs and Growth Tax Relief Reconciliation Act of 2003 provided that qualified dividends
would be taxed at capital gain rates for individuals, trusts and estates.
2012 2013 Percentage CAPITAL GAINS Rate Rate Change If currently in 0% 0% Unchanged 10%/15% bracket Ifcurrently above 15% 15% Unchanged 15% bracket If currently above 15% 18.8% 21% increase 15% bracket and subject to 3.8% additional tax 2012 2013 Percentage QUALIFIED DIVIDENDS
Rate Rate Change If currently in 0% 0% Unchanged 10%/15% bracket If currently above 15% 15% Unchanged 15% bracket If currently above 15% 18.8% 21% increase 15% bracket and subject to 3.8% additional tax
Under current law, investors face a significant increase in the federal tax rate of qualified dividends
in 2013, as high as 43.4%.