How much is the pension income amount for 2026, and which pension income counts toward it?
For 2026, the federal pension income amount is up to $2,000 of eligible pension income, claimed on line 31400 and worth $280 of tax at the 14% credit rate. The $2,000 isn't indexed. From the year your client turns 65, RRIF and annuity income counts; before that, mainly a registered plan's lifetime pension. CPP and OAS never count.
Which income counts toward the $2,000 depends on your client's age
Your client claims the lesser of $2,000 and their eligible pension income on line 31400, and what counts as eligible changes at 65 canada.ca. Under 65, a lifetime pension from a registered pension plan qualifies on its own. Almost everything else qualifies only if it was received because a spouse or common law partner died.
| Income | Where it shows up | Under 65 | 65 or older |
|---|---|---|---|
| Lifetime pension from a registered pension plan | T4A box 016, T3 box 31 | Yes | Yes |
| Variable payment life annuity from a money purchase RPP | T4A box 133 | Yes | Yes |
| RRIF payments | T4RIF boxes 16 and 22 | Only on a spouse's death | Yes |
| RRSP annuity payments | T4RSP box 16 | Only on a spouse's death | Yes |
| Lump sum from a money purchase RPP or SPP | T4A box 018 | Only on a spouse's death | Yes |
| Regular annuities and IAAC income | T4A box 024, T5 box 19 | Only on a spouse's death | Yes |
| Elected split pension received | Line 11600 (T1032) | Yes, subject to T1032 Step 4 | Yes |
| Foreign pension, including US Social Security | Line 11500 | Yes, minus any part deducted on line 25600 | Same |
| CPP, QPP and OAS | T4A(P), T4A(OAS) | No | No |
| Death benefits, retiring allowances, US IRA income | Various | No | No |
| RRSP withdrawals (T4RSP boxes 18, 20, 22, 26, 28, 34) | T4RSP | No | No |
The list of what never counts is short and firm: OAS, CPP, QPP, death benefits, retiring allowances, US IRA income, retirement compensation arrangement distributions, RRIF amounts transferred to an RRSP, RRIF or annuity, and foreign pension income that a treaty makes tax free in Canada canada.ca.
How much does the $2,000 save in 2026, federally and in each province?
Federally, the claim is $2,000 times the lowest rate. That rate is 14% for 2026 canada.ca, and the Department of Finance confirms most credits that cannot create a refund are valued at that rate
canada.ca. So the full claim saves $280 of federal tax for 2026. For 2025 the lowest rate was 14.5%, because it fell from 15% to 14% on July 1, 2025
canada.ca, so the same $2,000 saved $290. Older articles that quote $300 use the 15% rate that no longer applies.
The $2,000 itself never moves. Subsection 118(3) sets it as a flat figure laws-lois.justice.gc.ca, and section 117.1 leaves it off the list of amounts indexed each year
laws-lois.justice.gc.ca.
| Jurisdiction | 2026 maximum | 2025 maximum |
|---|---|---|
| Federal | $2,000 | $2,000 |
| Alberta | $1,753 | $1,719 |
| British Columbia | $1,000 | $1,000 |
| Manitoba | $1,000 | $1,000 |
| New Brunswick | $1,000 | $1,000 |
| Newfoundland and Labrador | $1,000 | $1,000 |
| Northwest Territories | $1,000 | $1,000 |
| Nova Scotia | $1,173 | $1,173 |
| Nunavut | $2,000 | $2,000 |
| Ontario | $1,796 | $1,762 |
| Prince Edward Island | $1,000 | $1,000 |
| Saskatchewan | $1,000 | $1,000 |
| Yukon | $2,000 | $2,000 |
The 2025 amounts come from the CRA's line 31400 page, which caps the provincial claim at the lesser of that amount and the federal line 31400 figure and puts it on line 58360 of Form 428 canada.ca. The 2026 amounts are the maximums printed on the 2026 provincial TD1 forms
canada.ca, for example $1,796 on the Ontario TD1ON
canada.ca. Quebec residents claim the provincial side through Revenu Québec, not Form 428.
How splitting can create a second $2,000 claim, and when it can't
A couple can elect on Form T1032 to move up to 50% of eligible pension income to the other spouse canada.ca. The receiving spouse reports it on line 11600, and both file the same signed election by the filing due date
canada.ca. The detail is on the page for pension income splitting. For the pension income amount, the effect is that a spouse with no pension of their own can pick up a $2,000 claim.
Worked example for 2026: Robert is 70 and receives a $40,000 lifetime pension from his former employer's registered plan. Anne is 62 and has no pension. They split $20,000.
| Step | Robert (70) | Anne (62) |
|---|---|---|
| Eligible pension income after the split | $20,000 | $20,000 |
| Line 31400, lesser of $2,000 and eligible income | $2,000 | $2,000 |
| Federal credit at 14% | $280 | $280 |
| Couple's pension credit without splitting | $280 | $0 |
| Couple's pension credit with splitting | $280 | $280 |
Splitting adds $280 of federal credit here because a registered plan's lifetime pension qualifies at any age. Change Robert's income to $40,000 of RRIF payments and the answer flips. Step 4 of Form T1032 removes RRIF, RRSP annuity and money purchase payments from the claim of a receiving spouse who is under 65 on December 31, and recalculates when what's left is under $4,000 canada.ca. With nothing left, Anne claims $0 on line 31400 until the year she turns 65. Splitting still moves the income to her lower bracket, which is often the bigger saving.
The age test is the year your client turns 65, not the payment date
The Income Tax Act gives the wider definition of eligible pension income to an individual who "has attained the age of 65 years before the end of the taxation year" laws-lois.justice.gc.ca. A client who turns 65 in December can count RRIF payments received in January of that year. T1032 uses the same test, phrased as age on December 31
canada.ca.
That timing drives a common planning move. A client 65 or older with no registered pension can convert part of an RRSP to a RRIF and take at least $2,000 a year, because RRIF payments count from 65 and ordinary RRSP withdrawals never do canada.ca. Check the year's required payment against the RRIF minimum withdrawal table first, since the minimum may already exceed $2,000.
When your client can't use the credit, the spouse can claim it on line 32600
The pension income amount is one of the amounts a spouse or common law partner can transfer, along with the age amount, the disability amount for self and current year tuition canada.ca. The transfer is limited to the part the pensioner didn't need to bring their own federal tax to zero, it's worked out on Schedule 2, and the provincial transfer goes on line 58640 of Form 428. No transfer is allowed if the couple was separated because of a breakdown for 90 days or more including December 31.
At source, a payer builds the credit into withholding from the TD1. Line 4 of the 2026 federal TD1 asks for the lesser of $2,000 and the estimated annual pension, and excludes CPP, QPP, OAS and GIS payments canada.ca.
Sources
Can a client under 65 claim the pension income amount on RRIF withdrawals?
Only if the RRIF payments were received because their spouse or common law partner died. Otherwise RRIF income doesn't count until the year they turn 65, though a lifetime pension from a registered pension plan counts at any age canada.ca.
Does US Social Security qualify for the pension income amount?
Yes, the part your client doesn't deduct on line 25600 as tax free under the treaty counts as foreign pension income. US IRA income never qualifies canada.ca.
Is the $2,000 indexed to inflation?
No. Subsection 118(3) fixes it at $2,000 and section 117.1 doesn't index it laws-lois.justice.gc.ca. Some provincial amounts are indexed: Ontario's rose from $1,762 for 2025 to $1,796 for 2026, and Alberta's from $1,719 to $1,753.
Do veterans benefits count toward the $2,000?
Some do. Subsection 118(3) adds the veterans retirement income security benefit and certain veterans income replacement benefits to eligible pension income for the $2,000 test laws-lois.justice.gc.ca.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.