Determining whether the rules apply to your client
The T1206 form includes several pages of detailed instructions to help you determine whether TOSI applies to your clients.
To better understand how the TOSI calculations affect your client(s), please review the instructions pages on the T1206 which include extensive definitions of “split income” and several of the terms used in its definition.
The following sections help you understand how split income affects the calculation of various amounts and credits:
- The note under Part 1 TOSI-adjusted net income lists the amounts and credits related to the taxpayer, including everything from the age amount to the British Columbia sales tax credit. The exception are:
- The age amount for Newfoundland and Labrador and Nova Scotia.
- Nova Scotia low income tax reduction.
- Income based credits on MB479, MB428A, NT479 and NU479.
- Page 3 of the instructions lists all the amounts related to spouses and dependants that must use their adjusted net income in their calculation.
- Page 4 of the instructions indicates how the taxable income used in the calculation of the amount to claim or transfer on all Schedule 11s (except Ontario) and Schedule 2s, as well as the disability amount transfer from a dependant, must be adjusted for the grossed-up value of the federal and provincial TOSI, as applicable for each party involved (taxpayer, spouse or dependant).