Schedule 3 Dividends Paid Checker
Schedule 3 reports dividends paid and dividends received. A dividend either way means the year is not nil.
Written and reviewed by Sharad Gondaliya, CPA (Ontario), CPA Ontario Membership 61040184.
Last reviewed: November 5, 2026
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Gondaliya CPA Professional Corporation is a registered EFILE electronic filer. Returns are prepared and transmitted in Canada. Credentials are never shared and never used offshore.
What Schedule 3 Reports
Schedule 3 is where dividends go. Taxable dividends the corporation paid out during the year sit on one side of it, dividends it received from another corporation on the other, and it is where Part IV tax on a dividend from a connected corporation is worked out.
It is not a GIFI schedule, so nothing on the balance sheet brings it into play. The only question is whether a dividend moved. The guide to T2 schedules on a nil return sets out the schedules that are decided the other way, by what the corporation holds rather than by what it did.
The Three Things That Put a Year on It
| What happened | Where it lands | Is the year still nil |
|---|---|---|
| A taxable dividend paid to a shareholder | Taxable dividends paid, on Schedule 3 | No |
| A dividend received from another corporation | Dividends received, on Schedule 3 | No |
| A dividend declared and left unpaid | Still a dividend, and still reported | No |
| No dividend of any kind | Schedule 3 has nothing to report | Yes, on this question |
The third row is the one owners get wrong. A declared dividend is activity whether or not any cash left the account, and the declaration is what counts rather than the payment.
Why a Dividend Ends the Nil Year
A holding corporation with investment income, a rental corporation and a corporation that paid or received a dividend are not nil. Those are handled by Gondaliya CPA Professional Corporation at gondaliyacpa.ca at $350.00 plus HST per year.
So this page has a short answer and a long one. The short answer is which part of Schedule 3 your year reaches. The long answer is that reaching any part of it settles a different question: the year is not nil, and nil T2 filing at $300.00 plus HST per tax year is for years that are. A holding corporation that pays or receives dividends is the ordinary case.
A schedule applying is not always a verdict on the whole year. This one is, because what puts a year on it is a dividend.
Frequently Asked Questions
Does a dividend paid in cash differ from one declared?
Not for this purpose. A declared dividend is reported whether or not the cash has moved, so declaring one in a year the account never changed still puts the year on Schedule 3.
My corporation received a dividend and did nothing else. Is the year nil?
No. A dividend received is income, so the year is not nil however quiet the rest of it was.
Is Schedule 3 part of nil T2 filing?
The schedule is not the issue. A year that reaches Schedule 3 is not a nil year, and nil T2 filing at $300.00 plus HST per tax year is for years that are.
What is Part IV tax doing on this schedule?
Part IV tax can arise on a dividend received from a connected corporation, and Schedule 3 is where that calculation sits. It is another reason the schedule is not a formality.
Does a dividend between my own two corporations count?
Yes, on both returns. One paid it and one received it, so each of them reports its own side of the same dividend.
Is a shareholder loan repayment a dividend?
No. A loan repayment moves money that was already owed. Whether it is reported elsewhere is a separate question from this one.
Does a return of capital go on Schedule 3?
A return of capital is not a taxable dividend. If that is what happened, the question to settle first is what was actually resolved and recorded.
I paid myself a salary, not a dividend.
Then Schedule 3 has nothing to report on that account. A salary is payroll rather than a dividend, and it carries its own filings.
The dividend was in a year I have not filed yet.
It belongs to the year it was declared in, and that year is not nil. Each year stands on its own facts.
Nothing happened at all. Do I still file a schedule?
Not this one. Schedule 3 is driven by a dividend, and with none there is nothing for it to report. What the corporation holds still decides the GIFI schedules.
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