I need help filling out T2 with line 450a (Schedule 3) for eligible dividends income. Not sure how this amount is used in assessing the tax.
I run a private incorporated company that has a dividend income from a portfolio of preferred shares from eligible Canadian companies. The T2 form provides a way to report this income as eligible dividends (line 450a in Schedule 3), but it is not clear to me how this is used in calculating the dividend tax refund. In particular, I cannot see how this helps reduce tax when the dividends are flown through to me as the shareholder.