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Pension Income Splitting

What is pension income splitting?

A tax payer can be able to elect jointly with his/her spouse or common-law partner to split eligible pension income as long as meet all the requirements. It can save you a lot of taxes if calculated properly.

Eligible pension:

  • – the taxable part of life annuity payments from a superannuation or pension fund or plan
  • – if they are received as a result of the death of a spouse or common-law partner, or if the transferring spouse or common-law partner is 65 years of age or older at the end of the year:
    • – annuity and registered retirement income fund (including life income fund) payments
    • – registered retirement savings plan (RRSP) annuity payments
    • – certain qualifying amounts distributed from a retirement compensation arrangement


Not Eligible pension:

  • – old age security payments
  • – Canada Pension Plan, Quebec Pension Plan
  • – any foreign source pension income that is tax-free in Canada because of a tax treaty income
  • – income from a United States individual retirement account (IRA)
  • -amounts from a RRIF included on line 115 and transferred to an RRSP, another RRIF or an annuity


  • – You are married or in common-law partner
  • – You were both residents of Canada on Dec 31 of the year
  • – You received qualified pension income