Ontario Taxation Act updated: dividend tax rates, small business rate, beer credit, Trillium Benefit thresholds, and procedural rules all revised

Plain-language summary · AI-assisted · not legal advice

Ontario's Taxation Act has been amended in several areas. The provincial gross-up rate applied to eligible dividends received by individuals is being reduced for tax years after 2026 (from 22.895% to 15.2283%), and the small business corporate tax rate will rise from 8.3% to 9.3% for days after June 30, 2026, narrowing the gap with the general rate. The Ontario Trillium Benefit payment rules are updated so that, starting with the 2025 base taxation year, the threshold for choosing a single annual payment rises from $360 to $500. The Ontario Computer Animation and Special Effects Tax Credit now has a clearer test for what prior-year labour expenditures reduce the current claim, and the Ontario Made Manufacturing Investment Tax Credit is now limited to expenditures incurred before January 1, 2027. The small beer manufacturers' tax credit formula is revised with new per-litre rates for the March 2026–February 2027 sales year and for years starting March 1, 2027. New procedural provisions incorporate additional federal assessment and evidentiary rules into the Ontario Act.

Who this affects: individual Ontario taxpayers receiving eligible dividends · Canadian-controlled private corporations claiming the small business deduction · film and animation production companies claiming tax credits · small beer manufacturers · recipients of the Ontario Trillium Benefit · corporations claiming the Ontario Made Manufacturing Investment Tax Credit