Most taxable income is taxed as regular income. Some incomes from corporations or trusts, are dividends or capital gains and have different tax treatments. When you select the INCOME type as OTHER for yourself, your spouse or your dependents as owner, you will be asked to select the tax treatment of the income from the following:
Not taxable. Most income is taxable, but some "Other Incomes" might not be. Gifts, inheritances, lottery winnings, and some grants and scholarships are not taxable, for example.
Income. Taxed as regular income. Tips and gratuities are taxable as income for example.
Non-eligible dividends. Usually paid out by small Canadian businesses subject to lower small business income tax rates. The amount is grossed up but then receives a dividend tax credit.
Eligible dividends. Paid out by large Canadian corporations that pay a higher corporate tax rate. The amount is grossed up but then receives a dividend tax credit.
Capital gains. Taxed at 50%. You may also receive Capital dividends, which are not taxed at all, so make sure not to confuse them.
Note that this other income will not be treated as earned and therefore not require CPP and EI contributions and it will not increase your RRSP room. If you have taxable regular income that is earned (for example controlled tips paid by your employer, or declared tips in Quebec), you should enter it as a SALARY instead so that contributions and benefits can be properly accounted for.
Make sure not to add any income that is already considered elsewhere. For example, you should not add income from your investments, withdrawals from your accounts, or CPP/QPP, OAS and U.S. Social security. If you have your own CCPC, you should enter any income from it using the other INCOME type entries described just below instead.