Line 40424 – Federal tax on split income

Tax on split income (TOSI) applies to certain types of income of a children under 18 years of age at the end of 2023, and amounts received by adult individuals from a related business. Where TOSI applies, the disability tax credit, dividend tax credit and foreign tax credit can be used to reduce the individual's tax payable for the year.

For more information, see Form T1206, Tax on Split Income.

Tax on split income for multiple jurisdictions

A new section has been added to calculate the provincial tax based on TOSI amounts for each province and territory. Use Part 4 of Form T1206 if you have to pay TOSI and are also completing Form T2203, Provincial and Territorial Taxes for Multiple Jurisdictions.  

Completing your tax return

The specified individual must report the income on the appropriate lines of their return. However, they can claim a deduction on line 23200 of their return for this income.

To calculate the specified individual's tax on split income, complete Form T1206, Tax on Split Income. The special tax is included in the calculation of their federal and provincial or territorial taxes.

Supporting documents

Filing electronically

Keep all of the specified individual's documents in case the CRA asks to see them later.

Filing a paper return

Attach Form T1206 to the specified individual's paper return.

Forms and publications

• Income Tax Package
• Form T1206, Tax on Split Income
• Form T2203, Provincial and Territorial Taxes for Multiple Jurisdictions

Related topics

• Lines 12000 and 12010 – Taxable amount of dividends from taxable Canadian corporations
• Line 12100 – Interest and other investment income
• Line 12200 – Net partnership income (limited or non-active partners only)
• Lines 13499 to 14300 – Self-employment income