Line 40424 – Federal tax on split income

Note: Line 40424 was line 424 before tax year 2019.

Tax on split income (TOSI) applies to certain types of income of a child born in 2003 or later, as well as to 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.

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 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

• Form T1206, Tax on Split Income
• Income Tax Package – Guide, Returns, Schedules

Related topics

• Line 12000 – Taxable amount of dividends (eligible and other than eligible) from taxable Canadian Corporations
• Line 12100 – Interest and other investment income
• Line 12200 – Net partnership income: limited or non-active partners only
• Lines 13500 to 14300 – Self-employment income