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Elected Pension Splitting


sunny_5000

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I would like to know why Ufile would add $2000.00 of income to my income tax  from my husband  for pension splitting.  It would seem that I would have to pay more taxes on my amount.  I can't see where the tax saving would be for me.  He had a nice refund and I owed money but like I said I did see an extra $2000.00 for pension splitting added to my income.  Can someone explain this to me?

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In its calculations, the program takes into account the rules governing pension income splitting. It considers all the factors involved to determine the optimal amount of pension income to be transferred to the other spouse.

You can modify the pension split by following these steps:

1- In the "QuikClik Navigator", on the left-hand side of the screen, select "Pension income, T4A, split pension".

2- On the page to your right, choose the last line "Split pension income with your spouse".

3- For the line "Do you wish to split eligible pension income with your spouse?", from the drop-down menu on your left, choose the option that suits you best among the following three:

A- Let MaxBack decide.

B- Transfer to spouse (you must specify the amount that you transfer).

C- Do not transfer to the spouse.

If you look at Step 5 of the T1032 form, you will notice that the system also indicates the split of deducted income tax. For Quebec residents, also note that the provincial and federal rules for income splitting are different.

Moreover, under the "Tax return" tab, you will find a document entitled "Report on split-pension income". By reviewing this report, you will be able to determine which one of the possible pension income splitting scenarios is the most beneficial for your couple.

For more information regarding pension income splitting, please consult the following links:

For the CRA:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/pnsn-splt/menu-eng.html

For Revenu Québec:

http://www.revenuquebec.ca/en/citoyen/declaration/produire/comment/aideligne/revenu-total/ligne123.aspx

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My income tax is already finished. I am looking at the results. I am trying to change it to see what the outcome would be has it not given me this extra money. Can you tell me the benefit of a higher income having an extra $2000.00? If the tax is based on a 40,000.00 threshold for my province and for Canada the amount is not affecting our income bracket. We remain in the same brackets which are different. We're not close to the threshold. I did not request the pension splitting when I filed my income tax with UFile. I always make sure that I don't share anything with my husband if I don't have to. I'm afraid of them giving him some of my money.

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  • 2 years later...
Quote

Can you tell me the benefit of a higher income having an extra $2000.00?

This is an old thread but it came up on a search so I thought I'd answer this question.

Of course UFile attempts to find the amount of pension splitting that results in the least tax for the couple. Why would it give $2000 to the higher-income spouse? There's a federal non-refundable tax credit on up to $2,000 of eligible pension income. If the higher-income spouse doesn't already have pension income of their own, this $2000 in pension transferred from the spouse will generate the tax credit. It should be on the return somewhere.

I guess if the two incomes are sufficiently different, maybe it's not worth, but that's why this counter-intuitive transfer is there.

I'm not an expert but I've seen it appear on the return.

=aw

 

 

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