Eligible pension income
What is eligible pension income?
- the taxable part of life annuity payments from a superannuation or pension fund or plan; and
- if they are received as a result of the death of a spouse or common-law partner, or if the pensioner 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; and
- certain qualifying amounts distributed from a retirement compensation arrangement.
For a more detailed list of eligible pension and annuity income, see the charts for line 314, Pension income amount:
- Eligible pension and annuity income (less than 65 years of age) or
- Eligible pension and annuity income (65 years of age or older).
Pension income that is not eligible
The following amounts received by the pensioner are not eligible for pension income splitting:
- 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 that entitles you to claim a deduction at line 256;
- income from a United States individual retirement account (IRA); or
- amounts from a RRIF included on line 115 and transferred to an RRSP, another RRIF or an annuity.
Variable pension benefits paid from a money purchase provision of a registered pension plan or payments out of a pooled registered pension plan are not considered life annuity payments and do not qualify unless the pensioner is age 65 or older at the end of the year or the variable benefits or payments are received as a result of the death of a spouse or common-law partner.
Do you qualify to split your pension income?
- you are married or in a common-law partnership with each other in the year and were not, because of a breakdown in your marriage or common-law partnership, living separate and apart from each other at the end of the year and for a period of 90 days or more beginning in the year (see the note below); and
- you were both residents of Canada on December 31 of the year; or
- if deceased in the year, resident in Canada on the date of death; or
- if bankrupt in the year, resident in Canada on December 31 of the year in which the tax year (pre- or post-bankruptcy) ends.
- you received pension income in the year that qualifies for the pension income amount or you were 65 years of age or older and received certain qualifying amounts distributed from a retirement compensation arangement (Box 17 of your T4A-RCA slips).
You and your spouse or common-law partner will still be eligible to split pension income if living apart at the end of the year for medical, educational, or business reasons (rather than a breakdown in the marriage or common-law partnership).
Eligible pension income can only be split between you (the pensioner) and your spouse or common-law partner (the pension transferee).
You are not prevented from splitting your eligible pension income because of the age of your spouse or common-law partner.
Forms and publications
- General Income Tax and Benefit Package - Guide, Return, and Schedules
- Form T1032, Joint Election to Split Pension Income
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