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What percentages are used to determine the dividends received deduction?

The threshold for the dividend received deduction is based on the percentage ownership of the company that the corporation owns. As you can see below, if the C corporation owns 0% to 20% of another company, then they will receive a 50% deduction. Ownership of 20% to 80% results in a 65% deduction. If the ownership is 80% or more, then the C corporation can take a deduction of 100% on the dividend received from the subsidiary.

The example below illustrates how an ownership of 40% translates into a percentage deduction of 65%:


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