Eligible pension income

What is eligible pension income?

Eligible pension income is generally the total of the following amounts received by the transferring spouse or common-law partner in the year (these amounts also qualify for the pension income amount):

  • 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 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; 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:

Pension income that is not eligible

The following amounts received by the transferring spouse or common-law partner 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.

Note

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 transferring spouse or common-law partner 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?

The transferring spouse or common-law partner and the receiving spouse or common-law partner can elect to split the transferring spouse or common-law partner's eligible pension income received in the year if all of the following conditions are met:

  • 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).

Notes

Eligible pension income can only be split between the transferring spouse or common-law partner and the receiving spouse or common-law partner.

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).

You are not prevented from splitting your eligible pension income because of the age of your spouse or common-law partner.

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