T1206: Tax on Split Income
Form T1206 is used to calculate the tax on split income (TOSI) that applies to certain income a specified individual receives from a related business.
This is the genuine CRA PDF, unmodified. Source: CRA official page.
What is T1206?
T1206, Tax on Split Income, calculates the additional tax that applies when a specified individual receives split income, such as dividends or income from a business connected to a family member, that is not an excluded amount. TOSI is charged at the top personal rate, so the form determines which amounts are caught and the tax owing on them.
This is a dynamic (XFA) PDF designed for Adobe Acrobat Reader and will not fill in a browser or a basic PDF viewer, so download it and open it in the free Adobe Acrobat Reader. Over its pages the form has you identify each source of split income, apply the exclusions that may reduce it, and calculate the tax that is then carried to your income tax return.
Who files T1206?
- Specified individuals who received split income during the tax year
- People receiving dividends or income from a business connected to a family member
- Taxpayers who need to determine whether an amount is an excluded amount
- Anyone the CRA rules require to calculate tax on split income for the year
How to fill out T1206
- Download the T1206 and open it in the free Adobe Acrobat Reader; it will not fill in a browser.
- Identify each amount of split income you received and its source.
- Apply the available exclusions to determine which amounts remain subject to TOSI.
- Calculate the tax on the split income using the steps on the form.
- Carry the calculated tax to the appropriate line of your T1 return filed with the CRA.
Get T1206
This is a dynamic PDF from CRA: it only fills in correctly in Adobe Acrobat Reader, so there is no in-browser fill here. Download the genuine T1206 below and open it in the free Adobe Acrobat Reader to complete and save it.
Download the official T1206 PDFFrequently asked questions
What is tax on split income?
TOSI is an additional tax charged at the top personal rate on certain income that a specified individual receives from a related business, unless the amount qualifies as an excluded amount. The T1206 works out which amounts are caught and the tax owing.
How do I know if an amount is excluded?
The rules include several exclusions, such as excluded shares, reasonable returns, and amounts for individuals aged 25 or older who meet certain tests. The T1206 and the CRA guidance walk through them; review your situation carefully or get advice.