How does pension income splitting work, and what can my client split before 65?
Pension income splitting lets your client move up to 50% of eligible pension income to a spouse or common law partner on Form T1032, filed with both 2026 returns. The pensioner deducts the amount on line 21000 and the spouse reports it on line 11600. RPP pensions qualify at any age; RRIF and annuity income generally only from 65.
Who can split, and what qualifies at each age?
Three conditions apply. Both spouses were resident in Canada on December 31 (or on the date of death), they weren't living apart because of a breakdown of the relationship for 90 days or more that include December 31, and the transferring spouse received income that qualifies for the pension income amount canada.ca. Living apart for medical, educational or business reasons doesn't block the election.
The transferring spouse's age at the end of the year decides what counts. Under 65 it's "qualified pension income", mainly life annuity payments from a pension plan. At 65 or older it's the broader "pension income" in subsection 118(7), and subsection 118(8) carves out OAS, CPP and QPP laws-lois.justice.gc.ca.
| Income (slip) | Transferor under 65 | Transferor 65 or older |
|---|---|---|
| RPP lifetime pension (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) | Only if received because a spouse died | Yes |
| RRSP annuity payments (T4RSP box 16) | Only if received because a spouse died | Yes |
| Regular annuities (T4A box 024, T5 box 19) | Only if received because a spouse died | Yes |
| RCA distributions (T4A-RCA box 17) | No | Yes |
| RRSP withdrawals (T4RSP box 22) | No | No |
| OAS, CPP, QPP | No | No |
| US IRA income | No | No |
| RRIF amounts transferred to an RRSP, RRIF or annuity | No | No |
The table combines the CRA's splitting page with its slip list for line 31400 canada.ca. The receiving spouse's age doesn't matter for eligibility. A 70 year old can split an RPP pension with a 58 year old spouse.
How does the T1032 amount flow through both returns?
Both spouses complete and sign Form T1032, Joint Election to Split Pension Income, and file it by the filing due date. On a paper return it's attached to both returns; when you file electronically, keep it in case the CRA asks. The figures on the two copies have to match canada.ca. The latest version on the CRA site is the 2025 form
canada.ca.
| Line | Transferring spouse | Receiving spouse |
|---|---|---|
| 11500 or 12900 | Reports the full pension as received | Nothing from this pension |
| 11600 | Nothing | Elected split pension amount (T1032 line 22) |
| 21000 | Deducts the elected split pension amount (T1032 line 22) | Nothing |
| 31400 | Lesser of $2,000 and eligible pension income left after the split | Lesser of $2,000 and eligible pension income including the split |
| 43700 | Keeps tax withheld on the part not split | Claims the share of withholding that follows the split |
The deduction and the inclusion come from the same box: line 22 of T1032 goes on line 21000 for the pensioner canada.ca and on line 11600 for the spouse
canada.ca. Tax withheld moves in the same proportion as the income, and when one slip mixes eligible and other income you prorate the withholding on line 35 of the form
canada.ca.
The split is a fresh choice each year. Your client can allocate anywhere from 0% to 50%, and the percentage can differ from last year's canada.ca. In law the cap is 0.5 × A × B/C: A is the pensioner's eligible pension income, B the months in the year the couple was married or common law, C the months in the pensioner's taxation year
laws-lois.justice.gc.ca.
Worked example: a 2026 split saves this couple $4,380 of federal tax
Ray is 70 with a $92,000 RPP pension plus $20,000 of CPP and OAS, so $112,000 of income. Lee is 66 with $30,000 of CPP, OAS and interest, and no pension income of her own. They split $41,000 of Ray's RPP pension, which leaves each of them at $71,000. The figures are federal only, at 2026 rates.
| Step | Ray, no split | Lee, no split | Ray, $41,000 split | Lee, $41,000 split |
|---|---|---|---|---|
| Income before split | $112,000 | $30,000 | $112,000 | $30,000 |
| Line 21000 or 11600 | none | none | minus $41,000 | plus $41,000 |
| OAS repayment at 15% above $95,323 | $2,501.55 | $0 | $0 | $0 |
| Net and taxable income | $109,498.45 | $30,000 | $71,000 | $71,000 |
| Federal tax on income | $18,643.19 | $4,200.00 | $10,751.01 | $10,751.01 |
| Age amount | $0 | $9,208 | $5,522.80 | $5,522.80 |
| Pension income amount | $2,000 | $0 | $2,000 | $2,000 |
| Credits at 14% (with $16,452 basic personal amount) | $2,583.28 | $3,592.40 | $3,356.47 | $3,356.47 |
| Federal tax plus OAS repayment | $18,561.46 | $607.60 | $7,394.54 | $7,394.54 |
Without the split the couple pays $19,169.06. With it they pay $14,789.08, so the election saves $4,379.98, about $4,380. The 2026 brackets are 14% to $58,523 and 20.5% to $117,045 canada.ca. The 2026 age amount is $9,208 and the OAS repayment threshold is $95,323
canada.ca. The age amount drops by 15% of net income above $46,432
laws-lois.justice.gc.ca, so it's gone at $107,819.67, which is why Ray has none before the split.
Where the $4,380 comes from: $2,501.55 of OAS clawback disappears, Lee picks up a $2,000 pension income amount worth $280, Ray gets back part of his age amount (net $257.26 across both returns), and $41,000 moving down from Ray's bracket saves $1,341.17. The full 50% ($46,000) gives the same federal total here, because both spouses stay inside the 20.5% bracket either way. The provincial brackets can tip the choice, so let the software run the percentage on the full return.
Which credits and benefits change when you split?
Anything measured on one spouse's net income can move: the age amount, the spouse or common law partner amount and the OAS repayment. Credits measured on combined family net income, like the GST/HST credit, don't change canada.ca. Before you file, check the OAS clawback on both returns, not just the pensioner's.
The spouse amount is the one that usually disappears. It's only available when the spouse's net income is under the claimant's basic personal amount canada.ca, so a split that lifts a low income spouse above $16,452 for 2026 ends that claim. The same split usually uses up credits the spouse was transferring on line 32600, such as an unused age amount or pension income amount
canada.ca. Compare the T1032 result against the transfer route before you assume the split wins.
The pension income amount is where the receiving spouse gains. The amount on line 11600 qualifies for line 31400 with no age condition, so a spouse under 65 with no pension of their own still gets the $2,000 canada.ca. The $2,000 cap is written into subsection 118(3) as a flat dollar figure
laws-lois.justice.gc.ca.
RCA income is the trap. At 65 your client can split qualifying RCA amounts from box 17 of the T4A-RCA canada.ca, but RCA distributions never qualify for the pension income amount
canada.ca. Neither spouse gets the $2,000 on that slice.
What changes for a late election, the year of death or a Quebec return?
Missed it, or picked the wrong percentage? The CRA may accept a late or amended election, or a revocation, if you ask within three calendar years after the filing due date. Both spouses must agree: an amendment needs a new T1032 signed by both, and a revocation needs a letter signed by both canada.ca.
Only one joint election is allowed per year. When both spouses have eligible pension income, they choose which one transfers canada.ca. An election is invalid if the Minister establishes that either spouse made a false declaration in it knowingly or through gross negligence
laws-lois.justice.gc.ca.
In the year of death, residency is tested on the date of death instead of December 31, and annuity payments received because a spouse died qualify whatever the survivor's age canada.ca. For a couple who married or became common law partway through the year, the B/C months factor in section 60.03 shrinks the 50% cap
laws-lois.justice.gc.ca.
Quebec runs its own transfer. The pensioner deducts it on line 245 with Schedule Q, but only if they were 65 or older at the end of the year. So an RPP pension split at 62 works federally and not on the Quebec return. When the spouse lives elsewhere in Canada, the line 245 amount is the amount deducted on federal line 21000 revenuquebec.ca.
Sources
Can a client under 65 split RRIF income?
Only if the RRIF payments were received because a spouse or common law partner died. Otherwise RRIF, RRSP annuity and regular annuity income can't be split until the transferring spouse is 65 at the end of the year, while an RPP lifetime pension can be split at any age canada.ca.
Does the receiving spouse have to be 65?
No. Eligibility depends on the transferring spouse's age and income. The receiving spouse can be any age, and the split amount on line 11600 counts toward their $2,000 pension income amount canada.ca.
Will the CRA cut the pensioner's withholding because of the split?
No. The CRA can't approve a reduction in tax withheld at source based on a pension splitting election canada.ca. The withholding is reallocated on the return through Step 5 of T1032, so a receiving spouse with little withholding of their own can end up with a balance owing.
Can both spouses split pension income with each other in the same year?
No. Only one joint election is allowed per tax year, so when both spouses have eligible pension income they pick one transferring spouse canada.ca.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.