Eligible pension income
What is eligible pension income?
Eligible pension income is generally the total of the following amounts received by the transferring spouse or common-law partner in the year (these amounts also qualify for the pension income amount):
- the taxable part of life annuity payments from a superannuation or pension fund or plan
- if they are received as a result of the death of a spouse or common-law partner, or if the transferring spouse or common-law partner is 65 years of age or older at the end of the year:
- annuity and registered retirement income fund (including life income fund) payments
- registered retirement savings plan (RRSP) annuity payments
- certain qualifying amounts distributed from a retirement compensation arrangement
For a more detailed list of eligible pension and annuity income, see the charts for line 314, pension income amount:
Pension income that is not eligible
The following amounts received by the transferring spouse or common-law partner are not eligible for pension income splitting:
- old age security payments
- Canada Pension Plan, Quebec Pension Plan
- any foreign source pension income that is tax-free in Canada because of a tax treaty that entitles you to claim a deduction at line 256
- income from a United States individual retirement account (IRA)
- amounts from a RRIF included on line 115 and transferred to an RRSP, another RRIF or an annuity
Variable pension benefits paid from a money purchase provision of a registered pension plan or payments out of a pooled registered pension plan are not considered life annuity payments and do not qualify unless the transferring spouse or common-law partner is age 65 or older at the end of the year or the variable benefits or payments are received as a result of the death of a spouse or common-law partner.
The transferring spouse or common-law partner and the receiving spouse or common-law partner can elect to split the transferring spouse or common-law partner's eligible pension income received in the year if all of the following conditions are met:
- you are married or in a common-law partnership with each other in the year and were not, because of a breakdown in your marriage or common-law partnership, living separate and apart from each other at the end of the year and for a period of 90 days or more beginning in the year (see the note below)
- you were both residents of Canada on December 31 of the year
- if deceased in the year, resident in Canada on the date of death
- if bankrupt in the year, resident in Canada on December 31 of the year in which the tax year (pre- or post-bankruptcy) ends
- you received pension income in the year that qualifies for the pension income amount or you were 65 years of age or older and received certain qualifying amounts distributed from a retirement compensation arangement (Box 17 of your T4A-RCA slips)
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 living apart at the end of the year for medical, educational, or business reasons (rather than a breakdown in the marriage or common-law partnership).
You are not prevented from splitting your eligible pension income because of the age of your spouse or common-law partner.
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