tukyank
New Member

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

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.

Seniors and students

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.

 

Thank you for choosing TurboTax.