Dividend gross-upThe dividend gross-up is a multiple used to calculate what shareholders owe in tax on dividends they received from Canadian-controlled private corporations (CCPCs) . Income within a corporation is taxed first at the organizations level, and then the after-tax proportion is additionally taxed in the hands of shareholders at the individual level. In 2013, the gross-up amounts for eligible dividends were 138% and for non-eligible dividends, 125%. Each province varies in terms of corporate and personal tax rates, so there are no absolute savings across Canada. Many taxpayers may view this rule as undesirable because grossing essentially artificially increases their income before they pay taxes on it, which in turn increases their taxable income. Controversy arises when dividends are grossed up before tax liability is calculated, and taxpayers argue that this gross-up could be just as effective after tax liability is calculated. Dividend gross-up can also cause additional problems when included in the calculation of tax filing penalties.....