Sarah, a single mother with a taxable income of $45,000, received eligible dividends of $2,000 from a Canadian corporation. Assume a dividend gross-up of 38% and a federal dividend tax credit rate of 15.0198% of the grossed-up dividend. How much is her federal dividend tax credit?

Question: Sarah, a single mother with a taxable income of $45,000, received eligible dividends of $2,000 from a Canadian corporation. Assume a dividend gross-up of 38% and a federal dividend tax credit rate of 15.0198% of the grossed-up dividend. How much is her federal dividend tax credit?

Answer options:

• $300.40
• $380.00 ✅ $414.54
• $760.00

Correct answer: $414.54

Explanation: Eligible dividend gross-up: $2,000 * 1.38 = $2,760. Federal dividend tax credit: $2,760 * 0.150198 = $414.54.