Pension Income Splitting in Canada: The Rules, the Pension Income Amount and the Age Amount

Pension income splitting lets spouses or common-law partners move up to 50% of eligible pension income to the lower-income partner each year, by both signing Form T1032 with their returns (Canada Revenue Agency, checked October 2026). From 65, RRIF and annuity payments count; before 65, generally only payments from a registered pension plan do. OAS and CPP can't be split this way.

Maybe your parents have one good workplace pension and one small one, or most of the money sits in Dad's RRIF. They may be paying far more tax than they need to, and possibly losing some OAS to the clawback, while the other spouse's lower bracket goes unused. Splitting fixes that on paper, without moving any money.

What pension income can be split?

The age test is the age of the spouse whose pension it is, at the end of the year. CPP has its own option, pension sharing, which you apply for with Service Canada; see our CPP guide.

Who can split pension income?

• Spouses or common-law partners who were both resident in Canada on December 31 (or on the date of death).
• You can't have been living apart because of a breakdown in the relationship for 90 days or more including December 31. Living apart for medical reasons, such as one spouse moving to a retirement home or long-term care, doesn't stop you.
• Only one joint election per year. Withholding tax moves with the income in the same proportion.

Our take: If one parent has moved into care, don't stop splitting. It's exactly when it helps: the spouse at home often has lower income, and the care costs can be claimed as medical expenses on whichever return saves more.

How do you split pension income?

Both spouses complete and sign Form T1032, Joint Election to Split Pension Income, with the same figures, and file it with both returns by the filing deadline. If you file online, keep the signed form in case the CRA asks. The CRA can accept late or amended elections within three calendar years after the filing due date in some cases.

What is the pension income amount?

A non-refundable credit on line 31400 on up to $2,000 of eligible pension income each year (2025 returns). Ontario has its own, on up to $1,762. OAS and CPP don't qualify. Splitting can give both spouses the full $2,000 claim when only one has eligible pension income.

Tip: a parent 65 or older with no workplace pension can create eligible income by converting part of an RRSP to a RRIF and taking at least $2,000 a year. See our RRIF guide.

What is the age amount?

A federal credit for people 65 or older at the end of the year: up to $9,208 for 2026, reduced by 15% of net income above $46,432. Splitting can lower the higher earner's income enough to keep more of it. Unused age amount can be transferred to a spouse.

Example: how much can splitting save?

Illustrative only: a couple, both 70. One has $80,000 of pension and RRIF income plus OAS and CPP; the other has only OAS and CPP. Moving $30,000 of eligible income to the lower-income spouse can drop the higher earner out of a higher bracket, give both the pension income amount, and keep more of the age amount. The saving depends on the province and the exact incomes, so run the numbers each year.

What other tax credits can seniors claim?

• Canada caregiver credit if an adult child supports a parent.
• Disability tax credit for a lasting impairment.
• Ontario seniors care at home tax credit for eligible care costs.
• The full list is in our senior benefits guide.