# Pension income splitting in Canada: who qualifies, Form T1032 and a worked example

Source: https://canadataxdesk.com/credits-deductions/pension-income-splitting
Publisher: Canada Tax Desk (canadataxdesk.com), independent editorial site
Topic: Credits and Deductions
Last updated: 2026-10-20

> Pension income splitting lets a Canadian resident allocate up to 50% of their eligible pension income to a spouse or common-law partner by filing Form T1032 with both returns. The transferring spouse deducts the amount on line 21000 and the receiving spouse reports it on line 11600. CPP, QPP and OAS cannot be split this way.

## Key facts

- Maximum you can split: 50% of eligible pension income
- Form: T1032, Joint Election to Split Pension Income, signed by both spouses
- Lines used: 21000 (deduction), 11600 (receiving spouse), 43700 (tax withheld)
- Age 65 or older: RRIF, RRSP annuity and life annuity pension payments qualify
- Never eligible: OAS, CPP and QPP payments

## What is pension income splitting?

Pension income splitting is a joint election that moves part of one spouse's eligible pension income onto the other spouse's return, so the couple pays tax as if the income were shared. No money changes hands; only the tax reporting changes. You can allocate up to 50% of eligible pension income ([CRA, pension income splitting](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/pension-income-splitting.html)).

The saving comes from Canada's graduated rates. When one spouse is in a higher bracket and the other has room in a lower one, shifting income down can cut the combined bill. Splitting can also lower the higher earner's net income, which matters for income-tested amounts such as the age amount and the Old Age Security recovery tax.

Pension income splitting is one of several ways retirees can lower tax; our [credits and deductions guide](https://canadataxdesk.com/credits-deductions) covers the rest, and the [seniors' tax return](https://canadataxdesk.com/newcomers-students-seniors/seniors-tax-return) page explains the full filing picture after 65.

## Who can split pension income? The basic rules

Both spouses or common-law partners must meet the CRA's conditions for the tax year. If any one fails, the election is not available for that year.

- You were married or in a common-law relationship in the year.
- Both of you were residents of Canada on December 31 of the year.
- You were not living separate and apart on December 31 because of a breakdown in the relationship for 90 days or more in a row. Living apart for medical, education or work reasons does not disqualify you.
- The transferring spouse received income that counts as eligible pension income.
- Both of you agree to the election and sign Form T1032.

Only one joint election is allowed per year. If both spouses have eligible pension income, you choose which one is the transferring spouse; you cannot each split to the other in the same year.

## What pension income can be split?

What qualifies depends on the age of the spouse who is paid the pension, the transferring spouse. The line is drawn at age 65 at the end of the year.

| Type of income | Under 65 | 65 or older |
| --- | --- | --- |
| Life annuity payments from a registered pension plan (RPP) or superannuation fund | Yes | Yes |
| RRIF and life income fund (LIF) payments | Only if received because of a spouse's death | Yes |
| RRSP annuity payments | Only if received because of a spouse's death | Yes |
| Variable pension benefits from a registered pension plan | No | Yes |
| Old Age Security, CPP and QPP | No | No |
| US IRA payments and foreign tax-free pensions | No | No |

Eligible pension income by age of the transferring spouse (CRA)

Lump-sum RRSP withdrawals are not eligible pension income, even after 65. RRIF amounts transferred to another plan or annuity are also excluded.

## Can you split pension income before 65?

Yes, but only certain income. A spouse under 65 can split life annuity payments from a registered pension plan, which covers the monthly pension most people receive from a workplace defined benefit plan. RRIF, LIF and RRSP annuity payments can only be split before 65 when they were received because a spouse died.

The receiving spouse's age does not limit the split. A 62-year-old retired teacher can allocate part of her workplace pension to a 58-year-old husband who still works part time, as long as the other conditions are met.

> **CPP sharing is a different program:** CPP cannot be split on Form T1032. Spouses can instead apply to Service Canada to share their CPP retirement pensions, which changes the amounts actually paid to each of them. That is a separate application with its own rules.

## How to use Form T1032, the pension income splitting form

Form T1032, Joint Election to Split Pension Income, is the only way to make the election. The CRA says both spouses must complete and sign it, the information must be the same on both copies, and it must be filed by the filing due date for the year ([CRA, line 21000](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21000-deduction-elected-split-pension-amount.html)).

1. Decide who is the transferring spouse and total that spouse's eligible pension income from their T4A and T4RIF slips.
2. Choose the amount to allocate, from $0 up to 50% of that eligible pension income. Tax software can test several amounts to find the lowest combined tax.
3. Complete Form T1032 once, with identical figures for both spouses, and have both of you sign it.
4. On the transferring spouse's return, deduct the elected split-pension amount (line 22 of Form T1032) on line 21000.
5. On the receiving spouse's return, report the same amount on line 11600, Elected split-pension amount.
6. Move the matching share of income tax withheld on line 43700, and use Step 4 of Form T1032 to work out each spouse's line 31400 pension income amount.
7. E-filers keep the signed form in case the CRA asks; paper filers attach a copy to both returns.

The current version is the 2025 form (T1032-25e), used for 2025 returns. The 2026 version will appear with the 2026 tax package, usually in January 2027. You make a new election every year, so the split can change as income changes.

## How much can you split, and what happens to tax withheld?

You can split any amount up to half of the transferring spouse's eligible pension income. The best amount is usually the one that brings both spouses closest to the same taxable income, though income-tested amounts can shift the answer.

Tax already withheld at source follows the pension. The CRA requires it to be allocated in the same proportion as the pension income. If a pension of $100,000 had $20,000 withheld and you allocate 40% of it, $8,000 of the withholding moves to the receiving spouse's line 43700. This prevents one spouse from facing a large balance owing while the other gets a large refund.

## Pension income splitting example: a couple before and after

Anne, 67, receives $100,000 a year from a registered pension plan. Her husband Bill, 66, has $20,000 of CPP and OAS. Both live in Canada and file 2026 returns. The figures below show federal tax before credits, at the 2026 federal rates of 14% up to $58,523 and 20.5% from $58,523 to $117,045 ([CRA, 2026 tax rates](https://www.canada.ca/en/revenue-agency/services/tax/individuals/tax-rates-brackets/current-year.html)).

|  | Anne | Bill | Couple |
| --- | --- | --- | --- |
| Taxable income, no split | $100,000 | $20,000 | $120,000 |
| Federal tax, no split | $16,696.01 | $2,800.00 | $19,496.01 |
| Split $40,000 of Anne's pension to Bill | $60,000 | $60,000 | $120,000 |
| Federal tax after splitting | $8,496.01 | $8,496.01 | $16,992.02 |
| Federal saving |  |  | $2,503.99 |

Federal tax before credits, 2026 rates

Anne's split of $40,000 is 40% of her eligible pension income, inside the 50% limit. Before splitting, $41,477 of her income was taxed at 20.5%; after splitting, only $1,477 of each spouse's income is in that bracket. Provincial tax usually falls as well, so the total saving is larger than the federal figure.

Credits also move. Because Anne's income is a life annuity from a registered pension plan, Bill can generally claim a pension income amount of up to $2,000 on the split income, calculated through Step 4 of Form T1032, so the couple may get two pension credits instead of one.

## How splitting affects OAS, the age amount and other credits

Pension income splitting changes each spouse's net income on [line 23600](https://canadataxdesk.com/tax-slips/line-23600-net-income), and several amounts are tested against that line. The effect can be larger than the bracket saving.

### Old Age Security recovery tax

OAS is partly repaid when net income is above a threshold, which was $93,454 for 2025 and is $95,323 for 2026, according to the CRA's table of indexed amounts. In the example, if Anne also received OAS her net income would pass that level before splitting, and splitting would bring it well under. Check the receiving spouse too, since their income rises. Our page on the [social benefits repayment](https://canadataxdesk.com/newcomers-students-seniors/line-23500-social-benefits-repayment) shows how the repayment is worked out.

### The age amount

The federal [age amount](https://canadataxdesk.com/newcomers-students-seniors/age-amount-seniors) for 2025 is up to $9,028, reduced by 15% of net income above $45,522 and gone at $105,709. Using those 2025 figures for illustration, Anne's claim at $100,000 would be $856.30 and Bill's the full $9,028, a total of $9,884.30. At $60,000 each, both claim $6,856.30, a total of $13,712.60. For 2026 the CRA's indexation table sets the age amount at up to $9,208, reduced above $46,432 of net income.

### Amounts that can move the other way

Raising the lower-income spouse's net income can reduce amounts tested on that spouse's own income, such as their age amount, and it can trigger an OAS recovery for them if their income ends up above the threshold. Benefits based on combined family net income do not change, because splitting leaves the couple's total the same. Run the numbers both ways, and remember that instalment requirements may change if one spouse ends up with more tax owing than was withheld.

## What if you forgot to split pension income?

The CRA's rule is that Form T1032 is filed by the due date for the year. If you missed it, you can ask for the split to be added through Change my return in My Account or with Form T1-ADJ for both spouses, and the CRA decides whether to accept the late election. Include a completed T1032 signed by both of you.

If the split you filed was not the best amount, the same route can be used to ask for a revised amount. Expect both returns to be reassessed, and both spouses will receive a notice of reassessment.

## Step by step

1. **Confirm eligibility.** Check that you were spouses or common-law partners, both resident in Canada on December 31, and not separated 90 days or more because of a breakdown.
2. **Identify eligible pension income.** Total the transferring spouse's eligible pension income from T4A and T4RIF slips, using the under-65 or 65-and-older rules.
3. **Choose the split amount.** Pick an amount up to 50% of eligible pension income that minimises the couple's combined tax.
4. **Complete and sign Form T1032.** Fill in identical figures for both spouses and have both sign.
5. **Report on both returns.** Deduct the amount on line 21000 for the transferring spouse, report it on line 11600 for the receiving spouse, and allocate tax withheld on line 43700.

## Common questions

### Can I split my CPP with my spouse on my tax return?

No. CPP, QPP and OAS are not eligible pension income for Form T1032. CPP can only be shared through a separate pension-sharing application to Service Canada.

### Can I split RRIF income before age 65?

Generally no. RRIF and LIF payments become eligible for splitting when the RRIF holder is 65 or older at the end of the year. The exception is RRIF income received because of the death of a spouse or common-law partner.

### Does my spouse need to be 65 for pension income splitting?

No. The age test applies to the spouse who is paid the pension (the transferring spouse). The spouse receiving the allocation can be any age.

### Do we have to split 50% of the pension?

No. 50% is the maximum. You can choose any amount from zero to half of the eligible pension income, and the best amount is often less than 50%.

### Do both spouses have to file Form T1032?

Yes. The same completed and signed Form T1032 must be filed with both returns, with identical figures. E-filers keep it on hand in case the CRA asks for it.

### Can common-law partners split pension income?

Yes. The CRA treats common-law partners the same as married spouses for pension income splitting, provided the residency and living-together conditions are met on December 31.

## Sources

- [Adjustment of personal income tax and benefit amounts (2026)](https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/adjustment-personal-income-tax-benefit-amounts.html)
- [Pension income splitting](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/pension-income-splitting.html)
- [Line 21000, Deduction for elected split-pension amount](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21000-deduction-elected-split-pension-amount.html)
- [Form T1032, Joint Election to Split Pension Income](https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t1032.html)
- [Line 31400, Pension income amount](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31400-pension-income-amount.html)
- [Line 30100, Age amount](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-30100-amount.html)
- [Tax rates and income brackets, 2026](https://www.canada.ca/en/revenue-agency/services/tax/individuals/tax-rates-brackets/current-year.html)