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T
tukyank
April 20, 2022
Question

Can my wife and I use income splitting to reduce the tax impact of a Pension Lump Sum payout? We both work full time.

  • April 20, 2022
  • 1 reply
  • 0 views
Roughly half per pension payout went in a LIRA, the other half was a lump sum payment, but only 30% was paid in tax for the lump sum, and we are both high income earners.

    1 reply

    T
    Tom_Cheng
    April 22, 2022

    First, it depends on your pension income source, whether it is eligible for splitting or not.


    From what you said, you are both high-income earners. Pension income splits are only worth considering if you have a higher marginal tax bracket than your spouse.

     

    For more information and which pension income is eligible for splitting, please click:

    TurboTax  Understanding Pension Income Splitting for Seniors or Tax Tip: Income splitting benefits.

     

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