Pension income splitting

You and your spouse or common-law partner may be able to jointly elect to split your eligible pension income if you meet all of the requirements.

On this page

• Before you start
• Can you elect to split your pension income
• How to split your pension income
• How to claim the pension income amount
• How to calculate income tax deducted at source entered on line 43700 of your return
• How pension income splitting may impact your federal, provincial and territorial benefits, credits and programs

Before you start

Only one joint election can be made for a tax year. If both you and your spouse or common-law partner have eligible pension income, you need to decide who will be transferring and who will be receiving. The transferring spouse or common-law partner will be electing to allocate part of the eligible pension income to the receiving spouse or common-law partner.

Can you elect 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's or common-law partner's eligible pension income received in the year if all of the following conditions are met:

• You and your spouse or common-law partner were not living separate and apart from each other, because of a breakdown in your marriage or common-law relationship, for a continuous period of 90 days or more which includes December 31 of the tax year.

  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 you were living apart at the end of the year for medical, educational, or business reasons (rather than a breakdown in the marriage or common-law relationship).

  You can split your eligible pension income with your spouse or common-law partner, regardless of their age, if you meet all of the other conditions.

• You and your spouse or common-law partner were residents of Canada on December 31 of the tax year (or on the date of death).
• You received any of the following in the tax year:
  • pension income that qualifies for the pension income amount, incuding eligible veteran benefits
  • certain qualifying amounts distributed from a retirement compensation arrangement (box 17 of your T4A-RCA slips) and you reached 65 years of age before the end of the tax year.

How to split your pension income

The transferring spouse or common-law partner and the receiving spouse or common-law partner must make a joint election on Form T1032, Joint Election to Split Pension Income.

This form must be completed, signed and attached to both spouse's or common-law partner's paper returns and filed by the filing due date. The information on the forms must be the same.

You can allocate up to 50% of your eligible pension income to your spouse or common-law partner.

Under certain circumstances, the CRA may allow you to make a late or amended election, or revoke an original election, if the application is made on or before the day that is three calendar years after the filing-due date for the year that the election applies. You and your spouse or common-law partner must agree to any amendment or revocation of the election.

If you want to amend the amount elected previously, or make any changes to the previously-reported pension income, a new completed and jointly-signed Form T1032 is required.

If you want to revoke the election to split pension income, you have to send a letter requesting to revoke the election and the letter must be signed by you and your spouse or common-law partner.

For more information, contact the Canada Revenue Agency (CRA).

How to claim the pension income amount

If you and your spouse or common-law partner elected to split your eligible pension income, follow the instructions at Step 4 of Form T1032, Joint Election to Split Pension Income, to calculate the amount to enter on line 31400 of both spouse's or common-law partner's income tax and benefit return.

The transferring spouse or common-law partner will be able to claim whichever amount is less:

• $2,000
• amount of your eligible pension income excluding amounts allocated to the receiving spouse or common-law partner

The receiving spouse or common-law partner will be able to claim whichever amount is less:

• $2,000
• amount of your pension income that is eligible for the pension income amount (using the chart for line 31400 on the Federal Worksheet) including the allocated pension income that is eligible for the pension income amount

How to calculate income tax deducted at source entered on line 43700 of your return

Income tax that is withheld at source from eligible pension income will have to be allocated from the transferring spouse or common-law partner to the receiving spouse or common-law partner in the same proportion as the pension income is allocated.

For example, if the transferring spouse or common-law partner allocates 50% of their eligible pension income to the receiving spouse or common-law partner, 50% of the income tax withheld at source on that pension income must also be allocated to the receiving spouse or common-law partner.

If the transferring spouse or common-law partner and the receiving spouse or common-law partner have jointly elected to split the transferring spouse's or common-law partner's eligible pension income, follow the instructions at Step 5 on Form T1032, Joint Election to Split Pension Income, to calculate the amount to enter on line 43700 of both spouse's or common-law partner's returns.

If the transferring spouse's or common-law partner's information slips include income tax deducted for both eligible and non-eligible pension income on the same slip, calculate the proportionate amount of tax deducted to be included on line 35 of Form T1032 for each slip, as follows:

• Eligible amount of pension
• divided byTotal amount of pension income (eligible and non-eligible)
• equalsResult
• multiplied byTotal income tax withheld at source
• equalsTax deducted related only to the eligible pension income

How pension income splitting may impact your federal, provincial and territorial benefits, credits and programs

Allocating pension income to a spouse or common-law partner reduces the transferring spouse's or common-law partner's net income and increases the receiving spouse's or common-law partner's net income. As a result, benefits and tax credits that are calculated using the total net income of both spouses or common-law partners (such as the GST/HST credit) will not change because of pension splitting.

However, pension splitting will affect any tax credits and benefits that are calculated using one taxpayer's net income, such as the age amount, the spouse or common-law partner amount, and the repayment of old age security benefits.

The allocation of pension income may also affect certain federal, provincial, or territorial programs.

Forms and publications

• Income Tax Package
• Form T1032, Joint Election to Split Pension Income

Related topics

• Line 11500 – Other pensions and superannuation
• Line 11600 – Elected split-pension amount
• Line 12900 – Registered retirement savings plan (RRSP) income
• Line 21000 – Deduction for elected split-pension amount
• Line 31400 – Pension income amount
• Line 43700 – Total income tax deducted