How does the spousal RRSP three year rule work, and when can my client's spouse withdraw without it being taxed back to my client?
Under the spousal RRSP three year rule, a withdrawal is taxed to the contributing spouse, up to the contributions they paid into any spousal RRSP in the withdrawal year and the two calendar years before it (ITA 146(8.3)). A December 2026 contribution taints withdrawals through 2028, so January 1, 2029 is the first clean date.
Which spousal plan withdrawals get taxed to the contributor?
When the annuitant takes money out of a spousal RRSP, the contributing spouse includes the lesser of two amounts: the withdrawal, and the total premiums they paid to any RRSP for that spouse in the withdrawal year or the two years before it laws-lois.justice.gc.ca. The CRA puts the safe harbour plainly: if your client made no spousal contribution in the withdrawal year or either of the two preceding years, nothing comes back to them
canada.ca.
| What the annuitant receives | Attributed to the contributor? |
|---|---|
| Lump sum from an unmatured spousal RRSP | Yes, up to contributions in the window |
| Commutation payment from a matured spousal RRSP | Yes, up to contributions in the window |
| Spousal RRIF payment up to the minimum amount | No |
| Spousal RRIF payment above the minimum amount | Yes, the excess only |
| Spousal RRSP transfer to an FHSA treated as a taxable withdrawal | Yes |
| Deemed receipt on deregistration | Yes |
| Periodic annuity payment from an RRSP | No |
| Direct transfer to an RRSP, RRIF or annuity that cannot be commuted for 3 years | No |
| Eligible HBP or LLP withdrawal | No, it isn't income at all |
The CRA's own example: Marc paid $2,000 into Stephanie's spousal RRSP in 2023, $2,000 in 2024 and $1,000 in 2025, and she withdrew $4,000 in 2025. Marc reports the full $4,000, the lesser of his $5,000 of contributions and her $4,000 withdrawal, and Stephanie reports nothing canada.ca.
How the three calendar years play out on real dates
Take Alex, who pays $6,000 into Sam's spousal RRSP on December 15, 2024 and another $6,000 on February 20, 2026, deducted on Alex's 2025 return. Alex makes no other spousal contribution. Sam withdraws $15,000. The only thing that changes below is the withdrawal date.
| Withdrawal date | Contribution years counted | Contributions in the window | Alex reports | Sam reports |
|---|---|---|---|---|
| December 1, 2026 | 2024, 2025, 2026 | $12,000 | $12,000 | $3,000 |
| March 3, 2027 | 2025, 2026, 2027 | $6,000 | $6,000 | $9,000 |
| January 4, 2028 | 2026, 2027, 2028 | $6,000 | $6,000 | $9,000 |
| January 2, 2029 | 2027, 2028, 2029 | $0 | $0 | $15,000 |
The February 2026 deposit counts in 2026, not 2025. Section 146(8.3) looks at premiums "paid" in the year and the two preceding taxation years, so the deduction year doesn't matter laws-lois.justice.gc.ca. The same logic is why a December 2026 contribution taints every withdrawal through December 31, 2028, and January 1, 2029 is the first clean date. A contribution made one month later, in January 2027, pushes that date a full year to January 1, 2030.
Every new spousal contribution restarts the count. A client who tops up the spousal RRSP each February never gets a clean year until they stop.
When does the rule not apply at all?
Section 146(8.7) switches the rule off in the year the contributor dies, and whenever either spouse is not resident in Canada at the time of the withdrawal laws-lois.justice.gc.ca. Section 146(8.3) itself only applies if the spouses are not living separate and apart because of the breakdown of their relationship at that time, and the RRIF rule in 146.3(5.1) carries the same condition
laws-lois.justice.gc.ca.
Watch the wording on separation. It isn't "after the relationship ends": the test is whether they were living separate and apart because of a breakdown when the amount was received. The T2205 instructions list the same exceptions, add periodic annuity payments and RRIF minimum payments, and tell the annuitant to report the whole amount in each of those cases canada.ca.
HBP and LLP withdrawals escape because they aren't income to the annuitant: the CRA says not to include them on the return canada.ca. Attribution under 146(8.3) only moves an amount the spouse must include under 146(8), and 146(8) leaves out HBP and LLP "excluded withdrawals", so there is nothing to move
laws-lois.justice.gc.ca. The catch sits on the deduction side. A contribution your client makes to the spouse's RRSP in the 89 days before the spouse's HBP withdrawal can lose its deduction, to the extent it exceeds the plan's value after the withdrawal
canada.ca. For the plan itself, see the Home Buyers' Plan page.
How Form T2205 splits the income between spouses
The annuitant completes Form T2205, which works out how much each spouse reports canada.ca. The slip tells you whether a plan is spousal: box 24 of the T4RSP or box 26 of the T4RIF
canada.ca.
| Part of T2205 | What it computes | Where the amounts go |
|---|---|---|
| Part 1, line 10 | Lesser of the net withdrawal and the contributions in the window | Contributor, line 12900 |
| Part 1, line 11 | The rest of the RRSP withdrawal | Annuitant, line 12900 |
| Part 2, line 21 | Lesser of the excess over the RRIF minimum and the contributions left in the window | Contributor, line 11500 if 65 or older at year end, otherwise 13000 |
| Part 2, line 22 | The rest of the RRIF payments | Annuitant, line 11500 if 65 or older at year end, otherwise 13000 |
Tax withheld doesn't follow the income. Only the person named on the T4RSP or T4RIF can claim the tax deducted, so the annuitant claims all of it while the contributor picks up the income canada.ca. Expect a balance owing on the contributor's return. On paper returns both spouses attach a copy of T2205. If they file electronically, they keep it in case the CRA asks. The amount withheld at source follows the lump sum withholding rates on the size of the withdrawal.
Which edge cases catch preparers out?
Contributions are used up oldest first. Section 146(8.5) applies earlier premiums before later ones, and 146(8.6) says a premium already attributed can't be counted again laws-lois.justice.gc.ca. The T2205 example shows it: Donald paid $3,000 into Diane's RRSP in 2022 and $8,000 in 2023. Her $5,000 withdrawal in 2024 used his $3,000 from 2022 and $2,000 of 2023, and her $4,000 withdrawal in 2025 came out of the $6,000 left from 2023, so Donald reported both
canada.ca.
Converting to a RRIF only shelters the minimum. Under 146.3(5.1) the contributor includes only payments above the year's minimum amount, but the minimum is nil for the year the RRIF is set up, so a RRIF opened and drained in the same year attributes in full laws-lois.justice.gc.ca. For the minimum factors themselves, see the RRIF minimum withdrawal table.
The spousal label follows the money. An RRSP or RRIF that receives a transfer from a spousal plan is itself a spousal plan in relation to the contributor laws-lois.justice.gc.ca. Moving the funds into the annuitant's own RRSP doesn't reset anything. The same three year test also decides whether a spousal RRSP can go to the annuitant's FHSA tax free: any spousal contribution in the current year or the two before turns the transfer into a taxable withdrawal
canada.ca.
Spousal RRSPs and pension income splitting do different jobs. Attribution decides who reports a withdrawal before retirement; splitting under the pension income splitting rules moves eligible pension income after the fact. For the wider income attribution rules on gifts and loans between spouses, see spousal attribution rules.
Sources
Does a February contribution deducted on last year's return count for last year?
No. The rule counts premiums by the year they were paid, so a February 2026 deposit deducted on the 2025 return is a 2026 contribution and taints withdrawals through 2028 laws-lois.justice.gc.ca.
If my client's spouse withdraws more than the contributions in the window, who reports the rest?
The annuitant. The contributor reports only the lesser of the withdrawal and the contributions in the window, and Part 1 of Form T2205 puts the balance on the annuitant's line 12900 canada.ca.
What if the contributor never deducted the spousal contribution that gets attributed back?
They may be able to deduct it. The T2205 instructions point the contributor to Form T746 to work out the deduction for unused RRSP contributions included in their income canada.ca.
Does the rule apply to a spousal RRIF?
Yes, but only above the minimum. Payments up to the year's minimum amount stay with the annuitant, and the excess attributes to the contributor up to contributions in the window laws-lois.justice.gc.ca. The CRA lists the same split in Guide T4040
canada.ca.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.