Why is the Ontario Surtax being assessed on the Ontario Income Tax less the Ontario non-refundable tax credit but without subtracting the Dividend Tax Credit?

[cx3-9a2-pql-88]

The Turbo tax program appears to be calculating the Ontario Surtax on the Ontario Income Tax less the Ontario non-refundable tax credits but is not subtracting the Dividend Tax Credit before it applies the 20% and 36% tax rates. I checked the CRA site form instructions and this is not correct i.e. the Dividend Tax Credit should be deducted before calculating the Ontario Surtax.  Has anyone noticed a similar issue? 

[TonyC11 · Accepted solution]

According to the Ontario schedule, Ontario Dividend Tax credit should be deducted before calculating Ontario surtax.

[cx3-9a2-pql-88]

But the Turbo Tax online version for Mac is not subtracting the Ontario Dividend Tax credit. I can tell from checking the math. Must be a bug in the system. Any idea who at Turbo Tax can help address this?

[cx3-9a2-pql-88]

I just found the answer to my question. Ontario changed the rules in 2014 increasing the Ontario dividend tax credit and no longer deducting the Ontario dividend tax credit when assessing the Ontario surtax. The combined adjustments should be tax neutral. Here is a link to the article.

http://www.taxtips.ca/ontax/dividendtaxcredit.htm