Pension Income Splitting for Couples

When one spouse gets most of the pension income, the two of you can choose to report up to half of the eligible pension income on the other spouse's return instead. The split is decided each year, on a form you both sign.

Who can split

You can make the election if all of these apply:

• You're married or living common-law, and on December 31 you hadn't been living apart because of a breakdown in the relationship for 90 days or more. Living apart for medical, educational or business reasons doesn't count against you.
• You were both residents of Canada on December 31 (or on the date of death).
• The spouse doing the transferring received pension income that qualifies for the pension income amount.

The receiving spouse's age doesn't matter. Only one joint election is allowed per year, so if you both have pension income, you decide which of you transfers.

Which income counts, and where 65 comes in

Lifetime pension payments from a pension plan (the taxable part of life annuity payments from a superannuation or pension fund or plan) can be split at any age.

Other income only counts if the transferring spouse is 65 or older at the end of the year, or received it because their spouse or partner died. That covers:

• RRIF payments, including life income fund payments
• RRSP annuity payments and other annuity payments
• certain amounts from a retirement compensation arrangement
• variable pension benefits from a money purchase pension plan, and payments from a pooled registered pension plan

Some income can't be split on your return at all. That includes Old Age Security, CPP and QPP benefits, foreign pensions that are tax-free in Canada because of a tax treaty, US IRA income, and RRIF amounts transferred into an RRSP, another RRIF or an annuity.

CPP has its own separate option. Service Canada's CPP pension sharing lets you share your CPP retirement pension with a spouse or partner you live with. It's a different program from pension income splitting, and it can't be backdated.

The joint election on Form T1032

• You both fill out and sign Form T1032, Joint Election to Split Pension Income, with the same information on each, by the filing due date. For 2025 returns that was April 30, 2026, or June 15, 2026 if either of you was self-employed. On paper, it's attached to both returns. If you file electronically, keep it in case the CRA asks to see it.
• You can allocate up to 50% of eligible pension income, and you don't have to use the same percentage as the year before.
• The transferring spouse deducts the split amount on line 21000. The receiving spouse reports it on line 11600.
• In some cases the CRA may allow a late or amended election, or let you revoke one, if you apply within three calendar years after that year's filing due date. You both have to agree, and a revocation needs a letter signed by both of you.

Tax already withheld moves too

Tax withheld from the pension follows the income in the same proportion. If 50% of the eligible pension goes to the receiving spouse, 50% of the tax withheld on it goes to their line 43700 as well. Step 5 of Form T1032 does the math. The CRA can't approve lower withholding at source because of a planned split.

The pension income amount

For 2025, the federal pension income amount is the lesser of $2,000 or your eligible pension income. BC's amount is the lesser of $1,000 or your federal claim. After a split, each of you works out your own claim in Step 4 of Form T1032. The split pension that qualified for the transferring spouse doesn't automatically qualify for the receiving spouse, because eligibility can depend on age.

Effects on benefits and OAS

Splitting lowers the transferring spouse's net income and raises the receiving spouse's. Anything based on your combined income, like the Canada Groceries and Essentials Benefit (formerly the GST/HST credit), stays the same. Anything based on one person's net income can change, including the age amount, the spouse or common-law partner amount, and Old Age Security repayments.

For 2025, you may have to repay some or all of your OAS if your net income (after certain adjustments) is over $93,454. The repayment is 15% of the amount above that threshold. For 2026 the threshold is $95,323. A split can bring one spouse under the line and put the other over it, so the right percentage depends on both returns. Our personal tax returns post covers the other ways a couple's returns connect.

How we help

Pension splitting is one of the extras we handle when preparing personal returns, quoted on top of the base return because it takes more work. Ask us why a number came out the way it did and we'll walk you through it. For bigger retirement questions, see our post on the RRSP meltdown strategy and our page for retirees.