Pension Spliting

Pension Income Splitting

You and your spouse or common-law partner may be able to split eligible pension income if you meet all of the following conditions:

You are married or in a common-law partnership and were not, due to a breakdown in the relationship, living separately for at least 90 days at the end of the year.
You were both residents of Canada on December 31 of the year, or if deceased, a resident of Canada at the time of death.
If bankrupt, you were a resident of Canada on December 31 of the year in which the tax year (pre- or post-bankruptcy) ends.
You received pension income that qualifies for the pension income amount.

Eligible pension income generally includes the following amounts received by the pensioner in the year:

The taxable portion of life annuity payments from a superannuation or pension fund or plan.
If the pensioner is 65 years or older at the end of the year, or if received due to the death of a spouse or common-law partner:
- Annuity and registered retirement income fund (RRIF), including life income fund (LIF) payments.
- Registered retirement savings plan (RRSP) annuity payments.
- Certain payments received under a retirement compensation arrangement.

Certain pension income sources are not eligible for splitting, including:

Old Age Security (OAS) payments.
Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) benefits.
Foreign-source pension income that is tax-free in Canada due to a tax treaty.
Income from a United States individual retirement account (IRA).
RRIF amounts included on line 115 that were transferred to an RRSP, another RRIF, or an annuity.

Ensuring eligibility and proper reporting can help maximize tax benefits while complying with pension income splitting regulations.