Pension Income Splitting in Canada: Who Qualifies, What Can Be Split and How to Elect

Pension income splitting is a tax election for spouses and common-law partners. It lets the person who receives eligible pension income report up to half of it on their spouse’s or partner’s tax return instead of their own.

No money changes hands and the pension itself is not divided. The election only changes where the income is reported for tax purposes. Both of you make the election together on Form T1032, and you decide each year whether to make it and how much to split.

Whether splitting lowers your combined tax depends on your individual incomes and circumstances. Depending on the couple, it can reduce combined tax or change very little.

Who Can Split Pension Income?

You can make the election for a tax year if all of the following apply:

• You are married or in a common-law partnership.
• Both of you were residents of Canada on December 31 of the tax year (or, if one of you died during the year, on the date of death).
• You were not living separate and apart because of a breakdown of your marriage or common-law relationship for a continuous period of 90 days or more that includes December 31.
• The spouse who is transferring income received eligible pension income in the year.

Living apart at year-end for medical, educational or business reasons does not, by itself, prevent the election.

The receiving spouse’s age doesn’t matter. The CRA says you can split eligible pension income with your spouse or common-law partner “regardless of their age” if you meet the other conditions. What does matter is the age of the spouse who receives the pension, and the type of pension income, as the next section explains.

What Pension Income Qualifies, and at What Age?

The age test applies to the transferring spouse (the one who receives the pension) at the end of the tax year. Only the taxable part of these payments counts.

Income type	Transferring spouse under 65	Transferring spouse 65 or older
Life annuity payments from a registered pension plan or other superannuation or pension fund or plan (for example, a workplace pension paid for life)	Yes	Yes
Registered retirement income fund (RRIF) payments, including life income fund (LIF) payments	Only if received because of the death of a spouse or common-law partner	Yes
RRSP annuity payments and other annuity payments	Only if received because of the death of a spouse or common-law partner	Yes
Variable pension benefits from a money purchase registered pension plan, and pooled registered pension plan (PRPP) payments	Only if received because of the death of a spouse or common-law partner	Yes
Certain qualifying amounts from a retirement compensation arrangement	No	Yes

So a pension from a registered pension plan can be split at any age, while RRIF and annuity income generally can’t be split until the pensioner is 65. The CRA publishes detailed lists of eligible pension and annuity income for both age groups.

What Pension Income Cannot Be Split?

The CRA lists these amounts as not eligible for pension income splitting:

• Old Age Security (OAS) payments
• Canada Pension Plan (CPP) and Quebec Pension Plan (QPP) payments
• Foreign pension income that is tax-free in Canada because of a tax treaty
• Income from a United States individual retirement account (IRA)
• RRIF amounts included on line 11500 that were transferred to an RRSP, another RRIF or an annuity

Ordinary RRSP withdrawals are not on the CRA’s list of eligible pension income either. The eligible RRSP category is RRSP annuity payments, and only from age 65 or on a spouse’s death.

How Much Pension Income Can You Split?

• Up to 50% of the transferring spouse’s eligible pension income for the year.
• You choose the amount. It can be anything up to the maximum; it doesn’t have to be 50%.
• It’s a new decision every year. You don’t have to use the same percentage as last year, or split at all.

The Income Tax Act sets the maximum as half of eligible pension income, multiplied by the number of months in the pensioner’s tax year during which the couple was married or in a common-law partnership, divided by the number of months in that tax year. In a normal year that’s the full 50%. It is reduced in the year you marry or become common-law partners: for example, a couple married for 6 of the year’s 12 months can split at most 25% (50% × 6/12) of that year’s eligible pension income.

In the year a pensioner dies, their tax year ends on the date of death, so the months are counted up to that date.

Pension Income Splitting Is Not CPP Pension Sharing

CPP payments cannot be included in the pension income-splitting election on Form T1032. “CPP pension sharing” is a different program, run by Service Canada:

• Pension income splitting (CRA): a tax election on your returns. It changes where eligible pension income is reported. CPP and OAS are excluded.
• CPP pension sharing (Service Canada): a separate application to share CPP retirement pensions between spouses or common-law partners. The shareable portion is based on the months you lived together during your joint contributory period. You apply through My Service Canada Account or with form ISP1002. Where both of you contributed to the CPP, Service Canada says the combined total of the two pensions stays the same whether you share or not.

CPP pension sharing has its own eligibility rules; see Service Canada’s pension sharing page. Splitting CPP credits after a divorce or separation is a third, separate process.

How the Election Works on Your Tax Returns

• Form T1032, Joint Election to Split Pension Income. Both spouses complete the joint election, and the information on both returns must match.
• The receiving spouse reports the elected split-pension amount on line 11600 of their return.
• The transferring spouse deducts the same amount on line 21000.
• Tax withheld moves too. Income tax withheld at source on the split pension income is allocated to the receiving spouse in the same proportion as the income. If 30% of the eligible pension income is split, 30% of the tax withheld on it is too.
• Paper returns: the signed form must be attached to both returns.
• Electronic filing: keep the signed form in case the CRA asks to see it.
• One election per year. Only one joint election can be made for a tax year.
• Deadline: the election is filed with each spouse’s return by the filing due date for the year.

Have your pension and RRIF slips on hand before you start; our checklist lists the slips you’ll need.

If you missed the election or want to change it, the CRA says that under certain circumstances it may allow a late or amended election, or the revocation of an original election, if the application is made on or before the day that is three calendar years after the filing due date for that year.

The current version of Form T1032 is available on the CRA’s T1032 page. The version for the 2026 tax year had not been published when this article was reviewed.

How Pension Splitting Can Affect Your Tax

Splitting moves taxable income from one return to the other. It does not automatically reduce tax. The result depends on both spouses’ incomes, ages and credits, and it can affect several parts of each return:

Marginal tax rates

If the transferring spouse’s income is taxed at a higher marginal rate than the receiving spouse’s, moving income across may reduce the couple’s combined tax. If the two already pay similar marginal rates, the effect may be small or nil.

The pension income amount

The split amount keeps its character on the receiving spouse’s return. That can let the receiving spouse claim the pension income amount (a federal non-refundable credit on up to $2,000 of eligible pension income) on the split income, depending on the type of income and the receiving spouse’s age. Ontario has its own provincial pension income amount.

The age amount and other income-tested amounts

Some credits and benefits shrink as net income rises, including the age amount for people 65 and older. Splitting lowers one spouse’s net income and raises the other’s, so it can increase one spouse’s income-tested amounts while reducing the other’s. The overall result has to be calculated for both returns together.

OAS recovery tax

OAS itself can’t be split on Form T1032. But the OAS recovery tax (often called the OAS clawback) depends on each person’s net income. For 2026 income, it applies to net income above $95,323, according to Service Canada. Splitting pension income changes the income each spouse reports, so it may affect whether, and how much, recovery tax applies to either of you. It is not an automatic reduction.

Two Examples

Example 1: unequal pension income. This illustrates the mechanics only; the figures are assumptions, not a tax estimate. Two Ontario spouses are both over 65. One receives $60,000 of pension from a registered pension plan, with $9,000 of tax withheld; the other has little income. They elect to split 40%:

• The transferring spouse reports the $60,000 pension and deducts $24,000 on line 21000.
• The receiving spouse reports $24,000 on line 11600.
• 40% of the tax withheld on that pension ($3,600) moves to the receiving spouse’s return.

Whether 40% is the right choice, or whether a different percentage would produce a lower combined tax, depends on the rest of each return. That usually means comparing several percentages.

Example 2: similar incomes. If both spouses already have similar taxable incomes and pay similar marginal rates, splitting may change the combined tax very little. It can even be worth checking whether splitting would reduce one spouse’s income-tested credits more than it helps the other.

Pension Income Splitting on an Ontario Tax Return

Ontario residents use the same Form T1032 election. The split changes each spouse’s income on the return, and Ontario tax is calculated from that return information. Ontario has its own tax brackets and its own non-refundable credits, including a provincial pension income amount and age amount. So the provincial effect of splitting can differ from the federal effect.

Common Questions

Do both spouses have to be 65 to split pension income?
No. The receiving spouse can be any age. The transferring spouse’s age affects which income qualifies: a registered pension plan pension paid as a life annuity qualifies at any age, while RRIF and annuity income generally qualifies from age 65 (or earlier if received because of a spouse’s death).

Can we split CPP pension income?
Not on Form T1032. CPP is excluded from pension income splitting. Service Canada runs a separate CPP pension sharing program with its own application.

Does pension splitting reduce the OAS recovery tax?
It may affect it, because it changes each spouse’s net income, but it doesn’t automatically reduce it. The outcome depends on both incomes.

Do we have to split 50% of the pension?
No. 50% is the maximum. You can elect any amount up to it, and you can choose a different amount each year.

Can we change our pension-splitting election after filing?
The CRA says that, under certain circumstances, it may allow a late or amended election or a revocation if the application is made within three calendar years after the filing due date for that year.

When Professional Help May Be Useful

You can make the election yourself. Help from a tax preparer can be useful when you want to compare different splitting percentages across both returns, when you married, separated or a spouse died during the year, when you need a late or amended election, or when your pension income comes from several sources. If you want help, we can prepare both returns together.

Pension income splitting is also different from a spousal RRSP, where a spouse contributes to an RRSP in the other spouse’s name before retirement. The two are separate strategies with separate rules.

Sources

• Canada Revenue Agency: Pension income splitting
• Canada Revenue Agency: Line 11600 – Elected split-pension amount
• Canada Revenue Agency: Line 21000 – Deduction for elected split-pension amount
• Canada Revenue Agency: T1032 Joint Election to Split Pension Income
• Canada Revenue Agency: Line 31400 – Pension income amount
• Income Tax Act: section 60.03
• Service Canada: CPP pension sharing
• Service Canada: OAS pension recovery tax

Last reviewed: September 2026. This guide is general information, not advice for a specific situation.